Crypto bloodbath prompts staff cuts across industry

In Token Issue this week, we look at staff cuts across the crypto industry, and a startup that looks to stamp out financial fraud. [Read from your browser]( Token Issue Welcome to Token Issue! Delivered every Friday, this free newsletter breaks down the biggest stories in Asia’s crypto scene and beyond. View past issues [here]( or [sign up here]( to receive future newsletters. Written by Shihan Fang Crypto journalist Hi {NAME} The crypto winter just got colder as more crypto majors announced steep job cuts. Last week, crypto exchange Kraken laid off 30% of its workforce - which works out to 1,100 employees. This week, Bybit and Swyftx are slashing headcounts, cutting 30% and 40% of their employees, respectively. Swyftx CEO Alex Harper said the company was preparing for the possible “worst-case scenario:” a continued decline in crypto markets next year and more “black swan” events like FTX, according to an internal staff message seen by the [Sydney Morning Herald](. “The truth is that Swyftx grew too fast. Our world was very different at the start of the year and our forecasts were for global trading volumes to carry on rising for at least six months longer than they did,” Harper said. While neither Bybit nor Swyftx were directly exposed to FTX, the collapse of one of the world’s largest exchanges has sent shockwaves across the industry, affecting not just other exchanges but also lenders and trading firms. Temasek-backed Amber Group has also laid off “hundreds” of employees and slashed over 50% of some of its teams on top of prior cuts in September that affected 30%-40% of its workforce. However, the firm said on [Twitter]( that for its clients and stakeholders, it was “business as usual.” But it’s not all bad news for former and existing crypto staffers. Bankrupt crypto lender Celsius Network, which tanked shortly after the Terra collapse early this year, has [won court approval]( to give out bonuses to its employees to keep them from quitting. These payments could amount to as much as US$2.8 million and will go to employees helping Celsius stay operational as it works to exit bankruptcy. The super rich in Singapore and Hong Kong also continue to eye digital assets as they look to diversify their portfolio. Specifically, over 70% of the 1,500 people polled [in a recent survey]( said they were moderately or highly interested in digital assets. 60% of those polled have investable assets worth US$500,000 to under US$5 million. Further, with Goldman Sachs looking to spend [“tens of millions of dollars”]( to buy or invest in crypto companies - most of which are struggling amid downward pressure for cryptocurrencies and lower trading volumes - its willingness to invest during the crypto winter signals a long-term opportunity. More job cuts are likely, but those with deeper pockets are taking this period of turbulence as an opportunity to “buidl” and to recruit quality talent from the pool of newly retrenched crypto staff. That brings us to this week’s story about EthSign, a startup building a crypto-powered Crunchbase competitor. – Shihan  ---------------------------------------------------------------  THE BIG STORY [EthSign aims to weed out financial fraud. Its first step: creating a crypto Crunchbase]( EthSign began as an e-signature platform that uses smart contracts for authentication and expanded into smart contracts to execute legal agreements. In 2022, the idea helped the startup raise US$12 million in seed funding, including investments from all three of Sequoia’s investment arms: Sequoia Capital, Sequoia Capital China, and Sequoia Capital India, which led to Mirana Ventures joining EthSign’s latest fundraising round. The company now wants to tokenize all relevant data from any given company in its database. This data could range from fundraising rounds to existing contracts and even capitalization tables - anything that would be interesting to potential investors or partners.  --------------------------------------------------------------- ⭐TO THE STARS A look at what’s pushing Web3 forward [Bank Indonesia publishes white paper focusing on wholesale CBDC]( Indonesia’s central bank has released a white paper detailing plans for the launch of its central bank digital currency (CBDC): the digital rupiah. The CBDC project has been dubbed Project Garuda and will focus on a wholesale CBDC first. A wholesale CBDC is used for interbank transfers and settlements as well as transactions related to central bank reserves. [NFTs ruled virtual property in China]( The Hangzhou Internet Court has ruled that NFTs are virtual property and protected by law. “As a virtual artwork, NFT collectibles condenses the creator’s original expression of art and has the value of related intellectual property rights,” the court said in its case summary posted on its [official WeChat account](. “NFT is a unique digital asset on the blockchain based on trust and consensus mechanisms among blockchain nodes. Therefore, NFT falls into the category of virtual property.” The court suggested that NFTs be regulated by the [E-commerce Law](.  --------------------------------------------------------------- 🌙TO THE MOON Promising crypto projects we’re noticing. [Pixelynx scores investment from Animoca Brands]( Los Angeles-based music metaverse-gaming platform Pixelynx is set to be bought by metaverse investment major Animoca Brands. The financing terms of the acquisition were not disclosed. Pixelynx seeks to give artists control over how they build experiences with fans, partners, and platforms. It also aims to create innovative ways for music lovers to develop, share, and monetize music. This acquisition follows another high-profile announcement in September that global music and entertainment company Warner Music Group was partnering with NFT marketplace OpenSea to allow select music artists to build and extend their fanbase into the Web3 community. --------------------------------------------------------------- 🌏BACK TO EARTH The week’s biggest roadblocks 1️⃣ [Crypto firm Orthogonal, victim of FTX Contagion, faces internal dissent]( Rifts have emerged between cryptocurrency trading firm Orthogonal Trading and its sister lending unit, Orthogonal Credit, after the former defaulted on crypto loans worth US$36 million from lending platform Maple Finance. Maple has severed ties with Orthogonal Trading, claiming the latter had misrepresented its exposure to Sam Bankman-Fried’s beleaguered FTX exchange. [Orthogonal Credit now claims]( that they too were kept out of the loop on Orthogonal Trading’s financial troubles and were not aware of the hole in its trading book. Orthogonal Credit, which oversaw a US$30 million stablecoin lending pool named Orthogonal Trading - USDC001 on Maple, has also been booted from Maple’s protocol. “We are shocked and dismayed,” Orthogonal Credit said in the statement. “We are speechless by the extent of the exposure and liquidity position of Orthogonal Trading’s book of business.” 2️⃣ [Stablecoin issuer Circle cancels plan to go public]( Circle, the company behind stablecoin USDC, has ended its agreement with Concord Acquisition Corp, a special-purpose acquisition company (SPAC). In July 2021, Circle announced plans to go public at a valuation of $4.5 billion. The valuation was then doubled when both firms amended their terms in February 2022. In a Twitter post, Circle CEO Jeremy Allaire said the firm didn't complete the US Securities and Exchange Commission's "qualification in time." The termination of the listing plans follows other crypto majors, including trading platform eToro in July and bitcoin miner PrimeBlock, canceling their SPAC listings.  --------------------------------------------------------------- STILL A PONZI SCHEME “SBF had good intentions, but just made some mistakes.” Lying is never with good intentions.” [CZ  Binance]( Changpeng Zhang, known as CZ, may have cast the final pebble, but he claims the crypto avalanche was only possible because FTX was poorly run to begin with. The Binance CEO and co-founder tweeted on Tuesday that “no healthy business can be destroyed by a tweet” and that it was actually a tweet from Alameda CEO Caroline Ellison that sparked the FTT dump. Binance is doing remarkably well in the wake of the FTX implosion. Now the world’s biggest crypto exchange by far, Binance saw a 30% surge in trading activity last month as users of FTX and other less reputable exchanges sought cover via the platform. That said, let’s hope CZ isn’t doing business in a glass house. --------------------------------------------------------------- MORE TO CHEW ON 1️⃣ [Did the crypto industry learn nothing from Mt. Gox?]( Eight years after the disastrous Mt. Gox hack, the collapse of FTX shows how far the crypto industry still is from secure and transparent trading, says a crypto veteran. 2️⃣ [Britain finalizing plans for crypto industry regulation]( Britain’s treasury is finalizing plans to regulate its cryptocurrency industry. The plans include limits on foreign companies selling into the country and restrictions on advertising. The framework will give the UK's financial regulator broader powers to regulate the sector and monitor how firms operate and advertise their products. 3️⃣ [CoinDesk's most influential 2022]( CoinDesk has compiled a list of the 50 most influential personalities in crypto for 2022. Topping the list is Binance CEO Changpeng Zhao for “vanquishing a $40 billion rival with a single tweet.” Two Twitter sleuths are also on the list: ZachXBT is number 2 while FatManTerra is at number 36. 4️⃣ [Hong Kong funds race to launch city’s first crypto-linked ETF]( Three Hong Kong-based asset management firms have applied to launch exchange-traded funds that will track bitcoin and ether futures. These ETFs will be traded on the Chicago Mercantile Exchange and will be meant for retail investors. The race for Hong Kong’s first crypto-linked ETF comes after the city announced plans to reestablish itself as a global crypto hub. The Securities and Futures Commission also announced that it could allow retail investors to trade in ETFs linked to digital assets.  --------------------------------------------------------------- That’s all for this issue - we hope you liked it. WAGMI! P.S. 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