Times are tough for the heavyweights of the cryptosphere, and Coinbase is not spared by the current environment. After announcing last June the layoff of 18% of its workforce, or approximately 1,100 positions, then cutting more than 60 additional jobs in November, the cryptocurrency exchange platform decided at the start of the year to further reduce its payroll, by cutting 20% of its workforce, i.e. 950 people, after an apocalyptic year 2022, concluded by the FTX scandal.
This restructuring, which is expected to cost Coinbase between $149 million and $163 million, will normally be completed in the second quarter. But from the first three months of the year, the American company intends to reduce its operating expenses by approximately 25% compared to the previous quarter. It must be said that the $7.8 billion in revenue earned in 2021, up 513.7% compared to 2020, now seems a long way off.
Coinbase stops fees in Japan
In the middle of the crypto winter, Coinbase’s austerity cure is not a surprise, while other players in the sector, such as the American broker Genesis or the Kraken and Gemini platforms, have also decided to reduce their workforce. However, the Brian Armstrong-led company also risks losing ground internationally, in the shadow of global leader Binance.
And for good reason, Coinbase announced the cessation of its operations in Japan, thus imitating its rival Kraken. All customers of the platform in the Japanese archipelago have until February 16 to withdraw their crypto assets. Coinbase, which cites current market volatility to justify its decision, also says it is conducting a full review of its operations in Japan, which opens the door to a permanent withdrawal of the platform in the land of the Rising Sun.
An international expansion called into question?
It remains to be seen whether the American company will question its development projects in other regions of the world. Last summer, despite its bleeding in its workforce, Coinbase planned to strengthen its presence in France and Europe. “In times of market downturn, the temptation can be to turn away from international expansion. We first entered the UK and EU during the 2015 bear market, a move that paid off in the bull run a few years later”said the Californian firm at the time.
However, the future does not necessarily look bright on the Old Continent. The MiCA regulation (Markets in Crypto-Assets) and the TFR regulation (Transfer of Funds Regulation) will indeed appear soon to better regulate a crypto sector which was illustrated last year by numerous abuses due to crooks like Sam Bankman-Fried, the fallen boss of FTX.