The cryptocurrency market was under stress recently following the collapse of Terra LUNA and the UST stablecoin. Most cryptocurrencies plunged to low levels, with Bitcoin dropping to below $28,000, erasing the gains made in 2021. Coinbase, one of the largest cryptocurrency exchanges globally, has announced that it will not hire any additional staff for the next two weeks and it will suspend some projects following the crypto market collapse.
Coinbase plans to minimize projects
Early this month, Coinbase released its financial results for the first quarter of 2022, posting a net loss of $430 million. The company’s stock has also recorded dips following the Q1 revenues, which could have prompted the company to make these new changes.
A recent publication revealed that the company will stop hiring additional staff over the next two weeks. It is also planning to cut down on some business processes and lower its spending on Amazon Web Services.
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A letter seen by The Information noted that the President and COO of Coinbase, Emilie Choi, said that “this slow down will also force us to be rigorous in our prioritization. We’re in a strong position – we have a solid balance sheet, and we’ve been through several market downturns before, and we’ve emerged stronger every time.”
The firm is also planning to compensate its employees through stock grants. Coinbase became a public company in 2021 through a direct listing on Nasdaq. It became the first largest exchange to go public, and at the time of launch, COIN traded at $400, but it has since slumped to around $67.
Coinbase’s $430M net loss
As aforementioned, Coinbase posted a $430M net loss for the first quarter of 2021. The company’s stock tanked following the announcement, but the company’s CEO, Brian Armstrong, said that investors had nothing to worry about regarding the company’s future.
The Q1 filings also revealed that Coinbase regarded users as “unsecured creditors.” It said that if the company went bankrupt, user funds would be held by the exchange. Armstrong also assured investors that the company was not filing for bankruptcy soon.
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