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Coinbase has announced their decision to cut down hiring after losing $420 million in the first quarter. This is according to information on a blog post from Coinbase.
The Start Of A Bad Year For Coinbase?
Coinbase is an online-based American company founded by Brian Armstrong and Fred Erhsam in 2012. It was established to serve as an exchange platform for Cryptocurrency and is presently the biggest exchange platform in the US based on trading volume.
In a public address by the President and COO, Emilie Choi, the decision was made in line with resource prioritization and an even bigger comeback. The present situation contradicts the company’s plan to outgrow its present size by three.
The slow hiring is an effect of the present downturn in the crypto market but it means an opportunity for full integration of recent hires. Emile assured the public of a positive financial position and to expect the best even after a decade of operations. Coinbase’s $420 million loss after just the first quarter means a 28% decline in expected value. In contrast, the first quarter of 2021 yielded $771 million in net profit. The company’s shares has also dropped by a significant 71% since the turn of the year.
Coinbase In A Legal Battle With Traders
In a time where Coinbase are facing tough times after recording a $420 million loss in the first quarter of the year, things could get even worse for the cryptocurrency exchange platform over the possibility of a lawsuit. This is according to media outlet, Bloomberg.
It has been reported that aggrieved customers have taken up legal action following damning revelations over crashed stablecoin, GYEN. Coinbase is accused of teaming up with the owners of the coin to spread misleading information which led to traders incurring tons of losses.
GYEN was supposed to be backed by the Japanese yen and it was believed to have its value pegged at 1 yen. It didn’t turn out to be so though as the Stablecoin assumed a value below the 1 Japanese yen as of November, 2021. The crash led to a massive loss with traders believed to lose millions in just a matter of hours. The suing investors wish to act on behalf of every party involved but are yet to quote how much they want in terms of compensation.