DCG’s Subsidiary Company LUNO Global Holdings Announces 35% Lay-off

Digital Currency Group ‘DCG’ owned Crypto lending platform Genesis Global Trading filed for Chapter 11 Bankruptcy last week. Today, LUNO Global Holdings has announced it will slash 35% of its workforce— citing Crypto Market turbulence, LUNO is owned by DCG— alongside ZCash, Coinbase, Coindesk, Decentraland, Kraken, Lightening Network, Ripple, Etherscan, Blockstream and Ledger, et al part of these companies were invested on by DCG.

According to its LinkedIn page, Luno’s total headcount is about 960 people, which means more than 330 jobs will be affected. This follows a report on CoinDesk last week, that its cofounder and CTO had quietly resigned last year December.

Marcus Swanepoel, CEO at Luno Group Holdings said; LUNO has unfortunately not been immune to the recent Crypto Market turbulence, which has affected its growth and revenue numbers. In a letter to employees about the lay-offs, Marcus Swanepoel said some unforeseen and “very extreme events” have impacted the cryptocurrency industry.

As a result, we have to readjust our focus to maintaining our leadership position in our core markets, and continue to lay a strong yet sustainable foundation for the business as we prepare to come out of this current cycle in a very strong position.

This includes a global economic downturn coupled with an even bigger downturn in the tech sector overall. “And on top of that, not just an ‘ordinary’ crypto winter, but a series of shocks including Luna [Terra], Three Arrows, FTX and Alameda Research Implosion that have had an overall compounding effect on our industry”.

This impacted Luno in several ways:

On the capital side, a significantly more constrained funding environment, with the market’s focus shifting from long-term investment to shorter-term profitability.

On the operating side, a negative impact on market sentiment and consequently on growth and revenue for the business.

Swanepoel said it’s not only Luno Group Holdings that’s affected but all its peers and competitors.

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.

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.

In a related twist, Gemini Trading Co-Founder Cameron Winklevoss has said: Unless Barry and DCG make a fair offer to creditors, we will be filing a lawsuit against Barry and DCG imminently.

While we have been working around the clock to negotiate an acceptable solution, Barry Silbert and DCG — the parent company of Genesis – continue to refuse to offer creditors a fair deal.

Grayscale, DCG’s subsidiary holdings sued the SEC almost immediately after its proposal was denied, claiming that the regulator was acting arbitrarily in rejecting the applications for Spot Bitcoin ETFs when it had previously approved Bitcoin Futures ETFs.

Consequently, SEC is looking at the block pledge and subsequent sale of $GBTC affected by Genesis Trading and Gemini. “Blatant disregard for Reg. 144 and easy case that disadvantaged regular investors via both time and price considerations.”

Interestingly, Binance has reportedly eliminated DCG’s ability to TWAP trade and potentially trade altogether on its Exchange. However, with upheaval happening in the Crypto Industry, Price actions on Bitcoin, Ethereum and other solid Altcoins does not consolidate with these recent Crypto turbulent events.