Luno, the crypto exchange owned by Digital Currency Group (DCG), is downsizing and laying off 35% of its workers globally.
The London-based digital asset exchange is the first (and one of only four) to be approved by the Securities Commission (SC) in Malaysia.
Initially setting up shop in Malaysia in 2015, Luno became the largest digital asset exchange in the country by 2017. During this period, its transaction value was said to be peaking at RM600 million per month.
Following the SC approval, Luno relaunched in late 2019 and was trading more than RM2.5 million worth of digital assets in the first 10 days. The company was also heavily involved in the founding of new cryptocurrency regulations for the country.
The high didn’t end there for Luno. It had garnered half a million users by November 2021 and processed over RM12 billion worth of payments in 2021 alone. It also expanded Luno’s cryptocurrency offerings to include Cardano and Solano last year.
And yet, Luno was not immune to the crypto winter that’s plaguing other players.
Claimed by the crypto winter
Since 2022, the crypto market has been facing a decline as cryptocurrency prices fell by more than half, and trading volume has waned.
This includes the Terra Luna crash that led to the bankruptcy of Three Arrows Capital (3AC), which was one of the most significant hedge funds in crypto.
That was followed by the collapse of several high-profile companies that filed for bankruptcy, such as FTX after its notorious scandal.
Sam Bankman-Fried, FTX’s co-founder and then-CEO, filed the company for bankruptcy in November last year. He was later charged with numerous counts of criminal fraud and was alleged to have used customer money to pay off debts incurred by his hedge fund, Alameda Research.
Luno’s CEO, Marcus Swanepoel, pointed to turbulent markets as the main reason why they have to let go of over 330 employees.
“While we anticipated a downturn and proactively planned ahead with a business and funding model that can be resilient to some of these factors, the sheer scale and speed of all of this happening, and all at the same time, has put significant strain on our original plan,” Swanepoel said.
“What this means in practice is that in addition to streamlining our strategy to focus on our core strengths, we need to also substantially decrease our cost base—which includes employee headcount in all of our markets—in order for us to be set up for success going forward.”
This is in line with measures taken by others in the cryptoverse, including Huobi, Coinbase, Blockchain.com, and Singapore-based Crypto.com.
Also DCG-owned, Genesis, a crypto broker, filed for bankruptcy protection last week. The CEO of DCG, Barry Silbert, has recently been accused of fraud too. The co-founder of another crypto exchange, Gemini, claimed Genesis Global Capital has defrauded more than 340,000 Gemini customers.
Despite the troubles spilling from DCG and Luno’s headcount axing, Luno Malaysia’s country manager, Aaron Tang, reassured customers that Luno’s operations in Malaysia, Singapore, and Indonesia are not affected.
“Customers will be able to deposit, withdraw, buy and sell in exactly the same way as before the recent announcement,” Tang said.
“We are confident that the internal changes announced will not have any impact on the services received by Luno Malaysia’s customers.”
With crypto-related establishments facing a bear market, what does this mean for Malaysian investors, and how will the overall crypto landscape be affected?
That’s something we’re keeping our eye on.
Featured Image Credit: Luno