Shalini Nagarajan

<div id="highlights-block_62b999ed17c35" class="highlights">
 <ul>
 <li>“Nobody knows when the market sentiment will change,” Bitpanda told employees</li>
 <li>Bitpanda is struggling to keep up with the crypto industry’s pace, the firm admitted</li>
 </ul>
 
</div>



Bitpanda is letting go of about a third of its workforce as the firm looks to navigate a period of turbulent markets and uncertainty.



The Peter Thiel-backed cryptocurrency exchange said in a <a href="https://blog.bitpanda.com/en/way-forward" target="_blank" rel="noreferrer noopener">letter to employees</a> that it wants to cut down its headcount from more than 1,000 to 730, citing a need to improve its financial health against the effects of an anticipated recession.



“Over the past few months, the market sentiment has dramatically changed, fuelled by geopolitical tensions, rising inflation and concerns about the imminence of a recession,” Bitpanda said in the letter.&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“There’s lots of uncertainty in the financial markets right now and, while we do know that the industry is cyclical, nobody knows when the market sentiment will change.”</blockquote>



Bitpanda admitted to facing challenges in keeping pace with the crypto industry’s growth. The company also said it has rescinded new offers as the roles it was previously hiring for are no longer available. It now plans to focus on safety and compliance, user experience, education and community.



&#8220;Move fast and break things&#8221; has been the motto of many companies looking to adapt [in] the Web3 space, Sheraz Ahmed, managing partner at STORM Partners, told Blockworks. “Now we can&#8217;t be acting surprised when the latter happens after the former,” he said.



The Vienna-based firm joins a <a href="https://cms.blockworks.co/crypto-industry-layoffs-may-have-unintended-consequences/" target="_blank" rel="noreferrer noopener">series of other crypto firms</a> looking to cut costs by slashing staff. Coinbase, one of the best-known exchanges, recently said it would <a href="https://cms.blockworks.co/coinbase-cut-workforce-ceo-wary-of-potential-recession/" target="_blank" rel="noreferrer noopener">cut 1,100 jobs</a> due to expectations of a recession. <a href="https://cms.blockworks.co/coinbase-backed-vauld-cuts-workforce-by-30-seeks-to-halve-exec-pay/" target="_blank" rel="noreferrer noopener">Vauld</a>, <a href="https://cms.blockworks.co/cryptocurrency-lender-blockfi-set-to-cut-staff-by-a-fifth/" target="_blank" rel="noreferrer noopener">BlockFi</a>, <a href="https://cms.blockworks.co/crypto-com-cutting-5-of-workforce-amid-digital-asset-downturn/" target="_blank" rel="noreferrer noopener">Crypto.com</a>, <a href="https://cms.blockworks.co/gemini-joins-growing-list-of-crypto-exchanges-cutting-staff-amid-downturn/" target="_blank" rel="noreferrer noopener">Gemini</a>, BitMEX, Buenbit and Bitso have all recently announced layoffs during a difficult period for the industry.



Record inflation and commodity shortages due to Russia’s war in Ukraine have created production challenges all over the world. David Malpass, head of the World Bank, said on Sunday that some countries will find it especially <a href="https://fortune.com/2022/06/27/world-bank-david-malpass-us-global-recession-inflation-interest-rates/" target="_blank" rel="noreferrer noopener">hard to avoid a recession</a>.&nbsp;



Economists at Goldman Sachs see an increased risk of a US recession. In a research note dated June 22, the bank said it now estimates a 30% probability the US economy enters a recession over the next year, up from a previous estimation of 15%. Additionally, it sees a 25% conditional probability of a recession in the second year if one is avoided in the first.



Bitpanda last raised $263 million in a Series C round at a <a href="https://cms.blockworks.co/crypto-exchange-bitpanda-valuation-spikes-242-to-4-1b-in-five-months/" target="_blank" rel="noreferrer noopener">$4.1 billion valuation</a> in August 2021. The company said it was the first Austria-based firm to pass the billion dollar valuation mark.



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Bitpanda To Slash Nearly 30% of Workforce, Citing Recession Threat

<div id="highlights-block_62b4597cb0d8f" class="highlights">
 <ul>
 <li>“Unlike KuCoin, Bybit responded to the OSC’s enforcement action,” the OSC said</li>
 <li>KuCoin is barred from operating in Ontario, while Bybit continues to work on registration</li>
 </ul>
 
</div>



The Ontario Securities Commission (OSC) has hit two foreign cryptocurrency exchanges with enforcement actions after finding they failed to comply with securities laws there. KuCoin has been banned from operating in the Ontario province, while Bybit agreed to pay a fine as it works with the authority to register appropriately.



“Bybit and KuCoin both operate unregistered cryptoasset trading platforms and allowed Ontario investors to trade securities without a prospectus or any exemption from the prospectus requirements,” the regulator said in a <a href="https://www.osc.ca/en/news-events/news/osc-holds-global-crypto-asset-trading-platforms-accountable" target="_blank" rel="noreferrer noopener">statement</a> on Wednesday.



KuCoin, based in Seychelles, has been ordered to pay an administrative penalty of about C$2.1 million ($1.6 million), including investigative charges. Meanwhile, Singapore-based Bybit has reached a settlement with the regulator for about $2.5 million.



“Foreign cryptoasset trading platforms that want to operate in Ontario must play by the rules or face enforcement action,” Jeff Kehoe, OSC’s enforcement director, said.&nbsp;



Bybit has agreed to continue working with the OSC to register its platform. In the event that registration talks fail, the exchange will close its operations with Ontario, the regulator said.&nbsp;



“Unlike KuCoin, Bybit responded to the OSC’s enforcement action, maintained an open dialogue, provided requested information, and committed to engaging in registration discussions,” the regulator said.



Existing Bybit retail customers in Ontario will be asked to close their positions in some restricted products involving leverage, margin or the extension of credit. The exchange <a href="https://cms.blockworks.co/bybit-to-slash-staff-citing-turbulent-markets/" target="_blank" rel="noreferrer noopener">told Blockworks</a> this week it’s looking to cut employee headcount by removing overlapping functions. 



The penalties come a little more than a year after the Canadian regulator warned exchanges operating in Ontario to contact the OSC by April 19, 2021 for registration or face enforcement action.



“Despite this warning, Bybit and KuCoin did not contact the OSC by the deadline and continued operations in Ontario,” the regulator said.



Authorities have been keeping a closing eye on cryptocurrency products as interest grows in the relatively nascent investment space. Earlier this year, crypto lender BlockFi agreed to pay <a href="https://cms.blockworks.co/crypto-lender-blockfi-to-pay-100m-in-fines-to-us-regulators/" target="_blank" rel="noreferrer noopener">$100 million in penalties</a> to the Securities and Exchange Commission over allegations it illegally offered a high-interest yield product. 



The rulings could lead to hesitation among North American investors to invest in cryptoassets as a result of the jurisdiction&#8217;s harsh regulatory framework, according to Sheraz Ahmed, managing partner at STORM Partners.&nbsp;



He thinks the exchanges themselves won’t be too concerned about financial penalties, as they have been operating successfully for years. “Fines are always preferable to complete bans, and sometimes it is better to ask for forgiveness than permission,” he said.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



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