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A Deteriorating Market and Job Cuts: Crypto Winter Is Here

Hello and welcome to Protocol Fintech. This Tuesday: The crypto winter hasn’t really gone away, the alleged manipulation of Do Kwon’s proposal, and HSBC’s move into fintech.

Crypto Winter is definitely here

The crypto winter was a thing of the past, it seemed. Well, maybe not: the crisis that began earlier this year is only getting worse for the fast-growing but increasingly controversial industry.

What was a $3 trillion market just a few months ago fell sharply over the weekend, falling below $1 trillion as crypto was rocked by a broad market downturn . The crash triggered a halt to withdrawals on a major network, big layoffs, and a hazy global outlook for the crypto.

“Due to extreme market conditions.” This is why crypto lender Celsius Network cited a stunning announcement: it was suspending all withdrawals and transfers between accounts.

  • The pause was necessary “to stabilize liquidity and operations while we take steps to preserve and protect assets,” Celsius said in a blog post. “We understand that this news is difficult.”
  • The move rocked a crypto market still reeling from the crash of the UST stablecoin. Binance added to the uncertainty by announcing that a “stuck transaction causing a backlog” forced the crypto exchange to briefly suspend bitcoin withdrawals.
  • Bitcoin itself has lost much of its value, falling to around $23,000 from a high of $67,000 just seven months ago.

Crypto cuts more jobs. The stock market crash also ended the crypto hiring spree.

  • BlockFi has announced that it is reducing its workforce by 20%. “Today is a painful day for BlockFi”, co-founder Flori Marquez said on LinkedIn.
  • Other crypto companies share this pain: Crypto.com said he was reducing by 5%. Gemini said it was cutting 10% of its staff. And Coinbase announced a hiring freeze and even canceled some job openings before saying on Tuesday it was cutting 18% of its workforce.
  • “We are leaving behind a time for crazy, unrealistic valuations, crazy hiring trends and a lot of excess,” Cathy Yoon, MPCH’s chief legal officer, told Protocol.

“Gravity is back with a vengeance,” Rob Siegel, a professor at the Stanford Graduate School of Business, said. Crypto was caught in “the perfect storm,” he told Protocol. And that may actually be a good thing for what remains a promising industry, Alex Johnson, author of the Fintech Takes newsletter, told Protocol: “The crypto winter is exactly what the space needs to wipe the slate clean. .

—Benjamin Pimentel (E-mail | Twitter)

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on the money

HSBC Bank trains thousands of employees in fintech. In a course developed with the Saïd Business School of the University of Oxford, the bank providing training to staff outside of its digital and technology teams with the aim of strengthening the fintech knowledge of employees.

Charles Schwab pays $187 million in SEC settlement. The second accused three investment advisor affiliates of Charles Schwab for misleading clients of its robo-advisor product, Schwab Intelligent Portfolios, encouraging clients to take risks for less money.

Goldman Sachs has traded an ether derivative for the first time. The investment banking giant realized its first transaction of non-deliverable Ethereum futures, a derivative that pays cash based on the price of ether.

A report from Bank of America suggests that consumers are still into crypto. The poll found that consumer interest in crypto is still strong despite recent market conditions, with growing interest in using crypto as a method of payment.

Jamaica has recognized its CBDC as legal tender. The first in the world to do so, Jamaica movement recognize its CBDC, the Jamaica Digital Exchange, aims to improve the financial situation of the country’s large unbanked population.

Understood

An anonymous Twitter user known as FatManTerramember of the Terra Research Forum who regularly criticized Terraform Laboratories for how the UST-luna meltdown happened, accuses Do Kwon of being behind a mystery wallet that voted for his own Terra revival proposal. “You’ll notice that every little thing they do is extract more money from the ‘community’ through pun and manipulation”, they or they tweeted.

While a number of crypto exchanges and businesses have been hit hard and layoffs are now commonplace, Binance says it’s really good. “We have a very healthy war chest; we’re actually increasing hiring right now,” CEO Changpeng Zhao said. Zhao says spending a lot on promotions like Super Bowl ads has crippled other businesses.

Your last in the Ripple versus. SECOND brawl: general counsel for Ripple Stu Alderoty said the second “deliberately muddied the regulatory waters of crypto,” and that there is a “we finally have to clean up this regulatory sludge” to advance in the potential of crypto.

Deal flow

Ohio-based Insurtech Branch raised $147 million in a Series C round, reaching unicorn status at a valuation of $1.05 billion. The company offers bundled auto and home insurance.

Indonesian Crypto Wallet and Crypto Trading Platform Pintu Raised $113M in Series B Round from Pantera Capital, Intudo Ventures, Lightspeed India Partners and Northstar Group. The company says it will be double its workforcewhile many other crypto platforms do the opposite.

The Canadian investment platform Delphia has raised $60 million in a Series A round led by Multicoin Capital. FTX Ventures, Lattice Ventures, Valor Equity Partners and Ribbit Capital also participated in the round.

New York-based crypto custody platform Entropy has raised $25 million in seed funding. A16z crypto led the round, with participation from Coinbase Ventures, Ethereal Ventures, and Dragonfly Capital. The founder of the company is a “anti-capitalist anarchist” build a decentralized self-guard solution.

Summer, a New York startup whose goal is to help customers finance their second home, raised $13.4 million in seed funding led by Lightspeed Venture Partners and QED Investors. The company was founded by former Airbnb employees.

AffiniPay acquired MyCase for an undisclosed sum. Austin-based AffiniPay serves legal, accounting, construction, design and association professionals, while MyCase provides legal management software.

A MESSAGE FROM THE STELLAR DEVELOPMENT FOUNDATION

On Stellar, wallets and fintechs can enable their users to easily convert digital assets to cash or cash to digital assets in thousands of participating sites in a growing list of countries around the world. Begin.

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Thanks for reading – see you tomorrow!