Rain Financial Inc., a Bahrain-based digital backed by Coinbase Ventures, has laid off dozens of its employees. Rain, described as one of the biggest digital currency exchanges in the Middle East, says the layoffs were necessitated by the market downturn.
Bloomberg reports that the firm has already conveyed the layoff to the employees concerned, citing persons close to the matter who did not want to be identified. The ax reached several departments, it said.
In a statement, co-founder and CEO Joseph Dallago confirmed the layoffs, calling it a tough decision. He said:
“As cryptocurrencies and global markets continue to slow down, this has, in turn, impacted businesses across the globe. We have had to make tough decisions to be able to navigate through this period of uncertainty and we can confirm we have downsized our Rain workforce.”
An estimate by Crunchbase put the firm’s headcount at between 251 to 500. Rain said it was looking to increase its workforce to 800 and expand its business in Africa and the MENA region in its last funding round back in January.
The trend of staff layoffs has been prevalent among digital currency firms in this market cycle. Gemini, the exchange founded by the Winklevoss twins, also recently announced that it would lay off 10% of its personnel globally. Incidentally, the U.S. Commodity Futures Trading Commission (CFTC) recently filed a lawsuit against Gemini accusing the exchange of lying about its BTC futures products back in 2017, stating that Gemini misled the regulator when it launched once of the first futures products in the digital assets market.
Similarly, Robinhood (NASDAQ: HOOD) announced back in April that it would lay off around 6% of its employees. In Robinhood’s case, the firm maintained that the layoffs were to make it leaner after a period of rapid expansion in 2021.
Digital currency market outlook still bleak
Many factors have contributed to the digital currency market downturn including the conflict between Russia and Ukraine, inflation concerns, and the crash of Terra’s algorithmic stablecoin, Terra USD (UST).
At present, the digital currency market capitalization stands at around $1.22 trillion per data from CoinMarketCap, a far cry from the more than $3 trillion it reached at its peak last year. The market is not showing any signs of turning around as the conditions that brought the downturn continue to linger.
Regardless, digital currency firms have remained optimistic about the market in the long term and are unmoved. Coinbase (NASDAQ: COIN) reported losses of $430 million in its Q1 earnings report. While blaming the dismal performance on “irrationally pessimistic customers” it maintained that its financials remained rock solid.
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