Crypto winter has come, and Coinbase is in trouble
Emma Roth - THE VERGE
Coinbase is pulling back on its hiring efforts. In a memo posted to Coinbase’s site, chief people officer L.J. Brock announced that Coinbase is putting a pause on hiring new employees, as well as rescinding several job offers already accepted by prospective workers, citing “current market conditions and ongoing business prioritization efforts.”
© Illustration by Alex Castro / The VergeCrypto winter has come, and Coinbase is in trouble
The shift comes as the cryptocurrency market continues to trend downwards, dragging the supposedly immovable stablecoins, which are pegged to a fiat currency or commodity, with it. Coinbase started to slow hiring in mid-May to make sure the company is “best positioned to succeed during and after the current downturn,” but this move halts hiring completely. Brock notes that the freeze will also affect backfills, or the employees hired to replace workers leaving the company. It excludes those hired to fill roles in “security and compliance,” however.
Coinbase is also contending with a lackluster response to the social NFT marketplace it launched widely in May. According to data from Dune Analytics viewed by The Motley Fool, 4,132 people purchased an NFT on the platform within 19 days of its launch, and gross sales amounted to $875,000, or an average of $46,000 per day. It doesn’t help that NFT sales are declining as a whole, dipping to about 19,000 sales per week at the beginning of May, as opposed to the 225,000 NFT sales made in September.
Coinbase’s hiring freeze is an indication of chillier conditions for the cryptocurrency market
It’s unclear how many job offers Coinbase rescinded, and the company didn’t immediately reply to The Verge’s request for comment. Brock says affected individuals will benefit from Coinbase’s “generous severance policy” and will gain access to a talent hub with various career resources, including interview coaching, resume review, and networking opportunities.
The changeup at Coinbase has left some prospective employees struggling. At least two individuals set to be hired by Coinbase say they may lose their OPT (Optional Practical Training) Visa due to the rescinded offer. Others say they received an email reassuring them that they won’t lose their newly-accepted job due to the company’s hiring slowdown, only to receive an impersonal email notifying them of a rescinded offer weeks later.
“You may have seen this week that Coinbase posted an external blog post announcing our intentions to slow down hiring so that we can reprioritize our hiring needs against our highest-priority business goals,” Coinbase’s initial email to new hires reads. “First and foremost, I wanted to communicate that we are still extremely excited about having you join Coinbase and we will not be rescinding the offers of any employees who have already signed or have received an offer from us.”
Coinbase beefed up its staff as part of its plan to hire 2,000 employees in 2022, saying it foresaw “enormous product opportunities ahead for the future of Web3” at the time. Its most recent earnings report reveals that Coinbase added 1,218 employees in the first quarter of 2022 alone, bringing its total headcount to 4,948.
“While we did not make this decision lightly, it is the prudent one given market conditions,” Brock stated in the letter. “We will continue to evaluate all of our options to responsibly navigate Coinbase through the current cycle.”
Coinbase’s hiring freeze is an indication of chillier conditions for the cryptocurrency market, and so are the layoffs made at other companies on the blockchain. Cameron and Tyler Winklevoss, the twins behind the Gemini cryptocurrency exchange, also announced that they’re cutting 10 percent of staff. The same goes for Rain, a large crypto exchange based in the Middle East, which also laid off dozens of employees.
Last week, famed short-seller Jim Chanos called Coinbase “tremendously overvalued” on the Crypto Critics Corner podcast (via Fortune), and predicts the price of its stock will sit “in the mid-teens” by the end of this year. Coinbase shares dipped 9.7 percent after news of the hiring freeze went public on Friday.
Emma Roth - THE VERGE
Coinbase is pulling back on its hiring efforts. In a memo posted to Coinbase’s site, chief people officer L.J. Brock announced that Coinbase is putting a pause on hiring new employees, as well as rescinding several job offers already accepted by prospective workers, citing “current market conditions and ongoing business prioritization efforts.”
© Illustration by Alex Castro / The VergeCrypto winter has come, and Coinbase is in trouble
The shift comes as the cryptocurrency market continues to trend downwards, dragging the supposedly immovable stablecoins, which are pegged to a fiat currency or commodity, with it. Coinbase started to slow hiring in mid-May to make sure the company is “best positioned to succeed during and after the current downturn,” but this move halts hiring completely. Brock notes that the freeze will also affect backfills, or the employees hired to replace workers leaving the company. It excludes those hired to fill roles in “security and compliance,” however.
Coinbase is also contending with a lackluster response to the social NFT marketplace it launched widely in May. According to data from Dune Analytics viewed by The Motley Fool, 4,132 people purchased an NFT on the platform within 19 days of its launch, and gross sales amounted to $875,000, or an average of $46,000 per day. It doesn’t help that NFT sales are declining as a whole, dipping to about 19,000 sales per week at the beginning of May, as opposed to the 225,000 NFT sales made in September.
Coinbase’s hiring freeze is an indication of chillier conditions for the cryptocurrency market
It’s unclear how many job offers Coinbase rescinded, and the company didn’t immediately reply to The Verge’s request for comment. Brock says affected individuals will benefit from Coinbase’s “generous severance policy” and will gain access to a talent hub with various career resources, including interview coaching, resume review, and networking opportunities.
The changeup at Coinbase has left some prospective employees struggling. At least two individuals set to be hired by Coinbase say they may lose their OPT (Optional Practical Training) Visa due to the rescinded offer. Others say they received an email reassuring them that they won’t lose their newly-accepted job due to the company’s hiring slowdown, only to receive an impersonal email notifying them of a rescinded offer weeks later.
“You may have seen this week that Coinbase posted an external blog post announcing our intentions to slow down hiring so that we can reprioritize our hiring needs against our highest-priority business goals,” Coinbase’s initial email to new hires reads. “First and foremost, I wanted to communicate that we are still extremely excited about having you join Coinbase and we will not be rescinding the offers of any employees who have already signed or have received an offer from us.”
Coinbase beefed up its staff as part of its plan to hire 2,000 employees in 2022, saying it foresaw “enormous product opportunities ahead for the future of Web3” at the time. Its most recent earnings report reveals that Coinbase added 1,218 employees in the first quarter of 2022 alone, bringing its total headcount to 4,948.
“While we did not make this decision lightly, it is the prudent one given market conditions,” Brock stated in the letter. “We will continue to evaluate all of our options to responsibly navigate Coinbase through the current cycle.”
Coinbase’s hiring freeze is an indication of chillier conditions for the cryptocurrency market, and so are the layoffs made at other companies on the blockchain. Cameron and Tyler Winklevoss, the twins behind the Gemini cryptocurrency exchange, also announced that they’re cutting 10 percent of staff. The same goes for Rain, a large crypto exchange based in the Middle East, which also laid off dozens of employees.
Last week, famed short-seller Jim Chanos called Coinbase “tremendously overvalued” on the Crypto Critics Corner podcast (via Fortune), and predicts the price of its stock will sit “in the mid-teens” by the end of this year. Coinbase shares dipped 9.7 percent after news of the hiring freeze went public on Friday.
Crypto SPACs Brace for Cruel Summer With Lower Valuations, SEC Scrutiny
Michael Bellusci
Here are crypto SPAC deals investors are watching:
Circle, the backer of the USDC stablecoin, and its combination with Concord Acquisition Corp. (CND). The parties reached a new agreement with an initial outside date of Dec. 8, with the potential to extend to Jan. 31, 2023, under “certain circumstances.”
Miner PrimeBlock with 10X Capital Venture Acquisition Corp. II (VCXA), in a deal expected to close in the second half of the year.
Miner Bitdeer and Blue Safari Group Acquisition Corp. (BSGA), in a deal that was recently extended.
Bitmain-backed miner BitFuFu and Arisz Acquisition Corp. (ARIZ), which is expected to list on the Nasdaq in Q3.
Miner Griid Infrastructure and Adit EdTech Acquisition Corp. (ADEX), originally expected to close in Q1.
Coincheck, one of Japan's largest crypto exchanges, with Thunder Bridge Capital Partners IV. The deal is expected to be completed in the second half of this year.
Investing platform eToro Group and FinTech Acquisition Corp. V (FTCV). The deal has a June 30 termination date.
Crypto investment platform Bullish and Far Peak Acquisition Corp. (FPAC), with an outside termination date that was recently extended to July 8.
Digital asset trading network Apifiny Group and Abri SPAC I, expected to close in Q3.
Michael Bellusci
COINDESK
Sat, June 4, 2022
Special purpose acquisition companies (SPAC) were Wall Street’s hottest way to hit the public market, but the craze has cooled amid an overall market downturn along with added Securities and Exchange Commission regulations.
If parties involved in existing deals want to proceed, they’re going to need to reprice them to reflect current market comps, Peter Stoneberg, managing director at M&A firm Architect Partners, told CoinDesk. “SPACs overall have been very volatile and on a downward trajectory,” Stoneberg said.
Last Wednesday, media outlet Forbes scrapped its plans to go public via a SPAC at a $630 million valuation through a merger with Hong Kong-based Magnum Opus Acquisition Ltd. (OPA). Crypto exchange Binance had previously provided a $200 million strategic investment in Forbes in conjunction with the proposed deal.
Regulation
To enhance investor protection, the SEC recently said that it would propose “specialized disclosure requirements with respect to, among other things, compensation paid to sponsors, conflicts of interest, dilution, and the fairness of these business combination transactions.”
The SEC’s report noted that SPACs nearly doubled the amount they raised from over $83 billion in such offerings in 2020 to more than $160 billion last year. The SEC added that in those years over half of all initial public offerings were conducted using a SPAC.
Stoneberg noted headwinds for SPAC participants. The SEC is now being more cautious on the overall SPAC process, particularly crypto-linked deals, he added.
Crypto miners and capital
Cryptocurrency miners require plenty of capital for data centers and rigs, but capital is scarce now, Stoneberg said.
“There’s not a lot of capital out there for mining companies right now or for SPACs,” he said. The private investment in the public equity (PIPE) market was “very active, but today it's pretty much dead.”
Sat, June 4, 2022
Special purpose acquisition companies (SPAC) were Wall Street’s hottest way to hit the public market, but the craze has cooled amid an overall market downturn along with added Securities and Exchange Commission regulations.
If parties involved in existing deals want to proceed, they’re going to need to reprice them to reflect current market comps, Peter Stoneberg, managing director at M&A firm Architect Partners, told CoinDesk. “SPACs overall have been very volatile and on a downward trajectory,” Stoneberg said.
Last Wednesday, media outlet Forbes scrapped its plans to go public via a SPAC at a $630 million valuation through a merger with Hong Kong-based Magnum Opus Acquisition Ltd. (OPA). Crypto exchange Binance had previously provided a $200 million strategic investment in Forbes in conjunction with the proposed deal.
Regulation
To enhance investor protection, the SEC recently said that it would propose “specialized disclosure requirements with respect to, among other things, compensation paid to sponsors, conflicts of interest, dilution, and the fairness of these business combination transactions.”
The SEC’s report noted that SPACs nearly doubled the amount they raised from over $83 billion in such offerings in 2020 to more than $160 billion last year. The SEC added that in those years over half of all initial public offerings were conducted using a SPAC.
Stoneberg noted headwinds for SPAC participants. The SEC is now being more cautious on the overall SPAC process, particularly crypto-linked deals, he added.
Crypto miners and capital
Cryptocurrency miners require plenty of capital for data centers and rigs, but capital is scarce now, Stoneberg said.
“There’s not a lot of capital out there for mining companies right now or for SPACs,” he said. The private investment in the public equity (PIPE) market was “very active, but today it's pretty much dead.”
Here are crypto SPAC deals investors are watching:
Circle, the backer of the USDC stablecoin, and its combination with Concord Acquisition Corp. (CND). The parties reached a new agreement with an initial outside date of Dec. 8, with the potential to extend to Jan. 31, 2023, under “certain circumstances.”
Miner PrimeBlock with 10X Capital Venture Acquisition Corp. II (VCXA), in a deal expected to close in the second half of the year.
Miner Bitdeer and Blue Safari Group Acquisition Corp. (BSGA), in a deal that was recently extended.
Bitmain-backed miner BitFuFu and Arisz Acquisition Corp. (ARIZ), which is expected to list on the Nasdaq in Q3.
Miner Griid Infrastructure and Adit EdTech Acquisition Corp. (ADEX), originally expected to close in Q1.
Coincheck, one of Japan's largest crypto exchanges, with Thunder Bridge Capital Partners IV. The deal is expected to be completed in the second half of this year.
Investing platform eToro Group and FinTech Acquisition Corp. V (FTCV). The deal has a June 30 termination date.
Crypto investment platform Bullish and Far Peak Acquisition Corp. (FPAC), with an outside termination date that was recently extended to July 8.
Digital asset trading network Apifiny Group and Abri SPAC I, expected to close in Q3.
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