OSL, a Hong Kong-based digital currency exchange, has become the latest digital assets firm to trim its workforce amidst the tumultuous market conditions the industry is facing. Around 40 to 60 employees, or about 15% of its headcount, have been shown the door at the exchange.
A spokesperson for the company confirmed the development to the Block, saying it was a difficult decision for the exchange to make and that it recognizes the impact it will have on the persons involved.
The spokesperson also emphasized that the job cuts are not due to any losses from investments. OSL was not exposed to troubled digital currency or firms, including staked Ether (stETH) and Terra’s algorithmic stablecoin TerraUSD (UST).
“It is important to note that OSL has not had any exposure to stETH, luna or UST. Nor have we had exposure to any of the firms reportedly facing solvency issues,” the person said.
In addition to the layoffs, the spokesperson noted that the exchange had adjusted its business model to focus more on software-as-a-service (SaaS), as well as professionals and institutional services.
OSL became the first and only digital assets firm insured and licensed by the Hong Kong Securities and Futures Commission after it gained its license in 2020, according to a Reuters report.
BC Group, the parent company of the exchange, also has significant backing from high-profile investors, including Fidelity International and Singaporean sovereign wealth fund GIC.
Digital currency firms are struggling to stay profitable
Globally, the finances of digital assets firms have been under a lot of pressure leading to a lot of downsizing among them. Several exchanges have announced staff cuts in recent months, including heavy hitters like Coinbase (NASDAQ: COIN), Gemini, and Crypto.com.
Others that have announced layoffs include BitOasis, BitPanda, and, more recently, Abra. A common reason is a reduction in trading activity in the market due to the drop in the price of digital assets. The recent market downturn that is being described as “crypto winter” is not likely to end soon as other markets are also struggling with rising inflation.
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