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Binance Announces Big Staffing Plans as Rivals Falter

Binance swims against the tide of red ink in the crypto sector with plans to increase the number of staff by between 15% and 30%.
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When was the last time you heard the words "crypto" and "hiring" in the same sentence?

In this new dark age of scandal, indictments and plummeting prices, discouraging words are about the only ones being heard.

The cryptocurrency market has lost nearly $2.1 trillion compared with its all-time high of $3 trillion reached in November 2021. The market is currently worth about $897 billion, according to data firm CoinGecko.

The various disasters hitting the sector include the overnight collapse of sister tokens Luna and UST in May, which sparked a credit crunch that forced the hedge fund Three Arrows Capital, or 3AC, to go into liquidation. 

Eminent crypto lenders like Voyager Digital and Celsius Network have filed for Chapter 11 bankruptcy.

And then in November, Sam Bankman-Fried's FTX crypto empire collapsed, a real shocker given the former trader's status as the institutional face of crypto.

Cryptocurrency Lead

Crypto Exchanges Cutting Staff

Now SBF, as he is called by some, is under federal indictment on wire fraud, conspiracy and money laundering charges.

Kraken, the world's third-largest crypto exchange by volume, said it was laying off about 30% of employees,

Huobi announced a 20% reduction in its workforce in an effort to reduce costs to cope with the fall in cryptocurrency prices. 

And now the most recent example comes from the cryptocurrency exchange Coinbase Global  (COIN) - Get Free Report, which said it would eliminate 20% of its current workforce, or roughly 950 jobs.

The new job cuts are the second wave of job eliminations by Coinbase in less than a year. Last June, the company cut 18% of jobs, or about 1,000 people.

Coinbase Chief Executive Brian Armstrong wrote in a Jan. 10 blogpost about "the fallout from unscrupulous actors in the industry," and that "there could still be further contagion."

Mizuho analyst Dan Dolev told investors that while this latest action creates a "near-term filler" for Coinbase's "dwindling" operating leverage, it does not help fix the company's number one problem, which is deteriorating volumes amid retail crypto trading fatigue, 

Cutting its workforce may also deepen Coinbase's ability to generate non-trading revenue as it potentially hurts its efforts to reinvent the "cryptoeconomy," the analyst said. 

Amid of this misery, who could possibly think about hiring staff? 

Binance CEO Says Company 'Not Super Efficient'

Well, Binance CEO Changpeng Zhao, apparently. 

Binance, the world’s largest cryptocurrency exchange plans to increase the number of staff by between 15% and 30%, Zhao said, according to CNBC.

Speaking at the Crypto Finance Conference in St. Moritz, Switzerland, Zhao said the company increased head count in 2022 from 3,000 people to “almost” 8,000.

Zhao said Binance needs to get the company “well-organized” ahead of the next crypto bull run and admitted the exchange is “not super efficient.”

On Jan. 10, Binance, disclosed major flaws in how it historically managed reserves of its BUSD stablecoin, leaving it facing at least $1 billion in undercollaterization on at least three occasions, according to Bloomberg.

Zhao also said that FTX "is not a big player, they just make a lot of noise," adding that "there’s definitely damage [but] the industry will be fine.”

"The team at Binance loves to drive home the point that they are constantly building and expanding their team – especially when other major exchanges are downsizing or spending money elsewhere," said Frank Corva, senior analyst for digital assets with Finder.

Corva said that a very similar dynamic played out in June when Coinbase announced  layoffs and, within hours, Zhao tweeted that Binance was looking to hire 2,000 employees.

"In that same tweet, CZ took a shot at the then operational FTX, stating 'it was not easy saying no to Super Bowl ads, stadium naming rights, large sponsor deals a few months ago, but we did'," Corva said.