Coinbase has announced their decision to cut headcount after a $420 million loss in the first quarter. This is according to information on a Coinbase blog post.
The start of a bad year for Coinbase?
Coinbase is an online-based American company founded by Brian Armstrong and Fred Erhsam in 2012. It was founded to serve as an exchange platform for Cryptocurrency and is currently the largest exchange platform in the US by trading volume.
In a public address by the President and COO, Emilie Choi, the decision was made in accordance with the prioritization of resources and an even greater comeback. The current situation contradicts the company’s plan to outgrow its current size by three.
The slow hiring is an effect of the current downturn in the crypto market, but it represents an opportunity for full integration of recent hires. Emile assured the public of a positive financial position and the best to expect even after a decade of operations. Coinbase’s $420 million loss after just the first quarter represents a 28% drop in its projected value. By contrast, the first quarter of 2021 delivered net income of $771 million. The company’s shares have also fallen by as much as 71% since the turn of the year.
Coinbase in a legal battle with merchants
At a time when Coinbase is going through tough times after losing $420 million in the first quarter of the year, things could get worse for the cryptocurrency exchange platform due to the possibility of a lawsuit. This is reported by Bloomberg news agency.
Aggrieved customers have been reported to have taken legal action after scathing revelations about the crashed stablecoin, GYEN. Coinbase has been accused of collaborating with the coin’s owners to spread misleading information, causing merchants to suffer tons of losses.
GYEN was said to be backed by the Japanese yen and it was believed to be valued at 1 yen. However, it turned out not to be as the Stablecoin took a value below 1 Japanese yen from November 2021. The crash led to a huge loss where traders believed they would lose millions within hours. The indicted investors want to act on behalf of all parties involved, but have yet to state how much they want in terms of compensation.
Sunil is a serial entrepreneur and has been working in blockchain and cryptocurrency space for 2 years. Previously, he was a co-founder of Govt. of India supported startup InThinks and is currently editor-in-chief at Coingape and CEO at SquadX, a fintech startup. He has published over 100 articles on cryptocurrency and blockchain and has assisted a number of ICOs in their success. He co-designed an industry training for blockchain development and has conducted many interviews in the past. Follow him on Twitter @sharmasunil8114 and contact him at sunil (at) coingape.com
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