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Cryptocurrency market plunges, largest US exchange Coinbase freezes staff

A representation of the cryptocurrency is seen in front of Coinbase logo in this illustration taken, March 4, 2022. REUTERS/Dado Ruvic/Illustration

Recently, the prices of various cryptocurrencies have depreciated to varying degrees, and it is not only investors who suffer, but also the platforms engaged in trading work. Coinbase, the largest U.S. cryptocurrency exchange, said last week that it would slow down the hiring process, while an internal employee email was obtained by The Information saying it would study throttling measures.

According to Coinbase, they will freeze the recruitment process for 2 weeks, but the appointment letter before that will continue to be valid; new operational projects will be suspended, and there is news that they will reduce the cost of escrow services. Since Coinbase wants to cut new hires, what about existing employees? Reports say they have instead increased employee retention, including handing out more shares in the company, although the associated value has plummeted by 75% over the past six months.

What about the new projects that will be discontinued? It is said that the commercial banking services Coinbase had prepared earlier will be postponed and the sales of core products, including retail and institutional transactions, will be strengthened. In addition, they also hope to develop more different types of cryptocurrency trading services, as well as to seek opportunities in markets outside the United States.

A Coinbase spokesperson quoted their chief product officer Surojit Chatterjee in response to our querytweetssaid it was refocusing on their “important products” and trying to “improve efficiency by enhancing developer productivity”, but stressed that it would not stop strategic investments and venture capital plans, as long-term goals are established during market downturns good time.

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Looking back at Coinbase’s first-quarter earnings report last week, their revenue was $1.16 billion, down 27% year-on-year, and halved quarter-on-quarter, while trading volumes also decreased. However, operating expenses also rose 9% to $1.7 billion as more than 1,200 additional employees were hired over the past year. Overall, Coinbase recorded a loss of $430 million in the first quarter of 2022, and I believe it will only get worse this quarter.

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