For the cryptocurrency business, the recent bear market has created many concerns and challenging circumstances. Several platforms shut down their operations and let go of their staff when their financial situation deteriorated. Nearly all platforms connected to the bitcoin business reported losses for the second quarter. This problem also affects Robinhood, a popular trading program.
Robinhood had to lay off 23% of its employees.
Although Robinhood began as a stock trading software, the addition of cryptocurrency has significantly increased its value. Shiba Inu and, more recently, Chainlink were added to the platform’s cryptocurrency portfolio this year, taking it a step further. This was supposed to increase the company’s revenue, however with the recent bitcoin crash, things went otherwise. Vlad Tenev, the CEO of Robinhood, announced a new round of layoffs on his blog:
780 employees, or 23 percent of Robinhood’s workforce, will lose their jobs. It’s important to note that this wasn’t Robinhood’s first downsizing this year. The corporation has laid off 9% of its workers just before the release of its first quarter results. Tenev wrote about the explanation for the most recent termination at Robinhood:
- We have seen a further deterioration in the macro environment, with inflation at a 40-year high, accompanied by a vast cryptocurrency market crash. This further reduced client trading activity and assets under custody.
Do cryptocurrencies really benefit Robinhood that much?
Tenev asserted in March that Robinhood would be given access to a number of new cryptocurrencies. Additionally, he added:
- We want to make a huge investment and hire a ton of people. We will try to do it as quickly as possible. We might add new crypto along the way.
- As CEO, I endorsed and took responsibility for our ambitious people trajectory – it’s my fault.
Even if Robinhood has introduced a variety of cryptocurrencies, its current predicament and the most recent meltdown may prevent the addition of further assets.
Additionally, the New York State Department of Financial Services [NYDFS] is currently investigating the site. A $30 million fine has been levied against Robinhood’s cryptocurrency division for breaking cybersecurity and anti-money laundering laws. Although the platform is now experiencing a wave of layoffs, the company has been charged with being “understaffed.” After experiencing so many fatal incidents, it is expected that Robinhood will now maintain a low profile.
Robinhood is the latest in a long line of failing businesses.
Numerous sector participants have fallen victim to a cascade collapse as a result of macroeconomic factors and the current crypto market catastrophe. Numerous businesses, including Voyager and the investment firm Three Arrows Capital, have suffered deadly blows as a result of the collapse of the Terra environment. Due to the fact that it specifically affects significant current market participants, like the Celsius lender, this deplorable scenario has received a lot of attention. The company, which was forced into bankruptcy, just announced a reorganization plan, but this bankruptcy and the discoveries, including its incompetence, particularly in terms of risk management, have severely tarnished its reputation.
The major firms are not exempt, as Coinbase in particular is having a difficult year in 2022 with layoffs, the collapse of its NFT marketplace, and the recent passing of Coinbase by Binance in terms of BTC held. Meanwhile, despite recent pronouncements from executives outlining the income loss brought on by the installation of KYC, Binance appears to be doing well. FUD (Fear, Uncertainty, and Doubt), or fear, uncertainty, and doubt, is rapidly gaining ground in the marketplace.