Lemon Cash Exchange Dumps 40% Of Staff

about 2 years ago

In today's edition of YIYL, (You Invest, You Lose) we take a look at the after-effects of failing exchanges. The bitcoin and shitcoin space is an interconnected world and when big exchanges like Celsius and FTX blow up, and prices continue to depress it makes it harder for other exchanges to source liquidity.

In addition, price downfalls push users away from the sector and that drives down trading volumes and fees. In addition, venture capital is not keen on funding projects in the space and this all means that companies need to scale down to try to survive.

We've seen a bunch of crypto-based companies cutting staff and Lemon Cash is no different. The Argentinean cryptocurrency exchange Lemon Cash announced that they had laid off 38% of their employees, or around 100 people.

The CEO released the information publically in a blog post, and blamed the international crypto environment, as well as a "recessionary period" in startup investments.

He also urged that the announcement was not related to the FTX collapse, and explained that although the company had user funds stored with FTX, they withdrew them prior to FTX halting withdrawals.

Lemon had closed a $44.1 million series A funding round earlier this year, which they kicked off in July 2021. So the fact that they need to scale down a year later is pretty surprising, you'd think a new company that is so well capitalised would have more than enough runway to keep on most of their staff.

What I think could also be an issue is the fact that customers all over the world have been rekt on price and are either giving up on the sector or they're pulling their funds off exchanges and starving these businesses of assets under management, but this is just my speculation.

Crypto exchanges chopping headcount

These layoffs are not only happening with smaller players in the space but even the biggest companies and household names have had to reduce their staff.

Gemini – a US-based trading venue spearheaded by billionaire twins Cameron and Tyler Winklevoss – dismissed 10% of its team in June and an additional 7% in July.
Coinbase – laid off 18% this summer. CEO Brian Armstrong argued that the global economy appears to be entering into recession after a decade of economic boom
CryptoCom, Bybit, Huobi, BitMEX, BlockchainCom, and many others have also put their names on the list.

I think the fact that institutions were so flush with cash and funded everything under the sun in this last bull run, we saw money companies going balls to the wall in terms of growth, and now that those predictions are looking dubious at best, they need to re-evaluate their business operations.

Sources: