Big cryptocurrency exchange Bybit lays off 30% of workforce as FTX contagion spreads

Former FTX CEO Sam Bankman-Fried has started a chain reaction in cryptocurrency exchanges, with many struggling to stay afloat.

A prominent cryptocurrency exchange has been forced to make mass job cuts just weeks after FTX sensationally collapsed.

Singapore crypto exchange Bybit reportedly laid off 30 per cent of its workforce over the weekend, citing the “deepening” bear market and the crypto winter.

Bybit, which has been operating for four years, is ranked in the top 10 for cryptocurrency exchanges worldwide.

On Sunday afternoon AEDT, Bybit’s CEO and founder Ben Zhou announced the news over social media.

“Difficult decision made today, but tough times demand tough decisions,” he wrote on Twitter.

In the thread, Zhou added: “We are all saddened by the fact this reorganisation will impact many of our dear Bybuddies and some of our oldest friends. I am very grateful for all of their contributions to Bybit over the years and we will not forget them.”

The layoffs will hit employees across the board.

Independent reporter Colin Wu reported that nearly a third of staff will get the chop out of Bybit’s 2000 person labour force.

It‘s the second time Bybit has announced mass layoffs in 2022.

1) Difficult decision made today, but tough times demand tough decisions. I have just announced plans to reduce our workforce as part of an ongoing re-organisation of the business as we move to refocus our efforts for the deepening bear market.

— Ben Zhou (@benbybit) December 4, 2022

The bear market is certainly worsening, as Mr Zhou pointed out, and it’s directly impacting companies like Bybit.

In mid-November, $32 billion cryptocurrency exchange FTX filed for bankruptcy and bombshell revelations have since emerged that the platform was poorly managed and little more than a Ponzi scheme.

Its founder and CEO, Sam Bankman-Fried, is facing criminals charges.

FTX’s collapse has had a flow-on effect to other exchanges, with some experts calling it a contagion.

Panicked traders tried to take their funds out of crypto exchanges and several have had to put a freeze on withdrawals because of liquidity issues.

Those companies included Brisbane exchange Digital Surge and Gemini, one of the biggest crypto buy-and-sell platforms, based in New York.

Bybit was also affected. CoinTelegraph reports that in late November, Bybit launched a US$100 million support fund to provide urgent liquidity that certain traders could then use.

It was distributed with a zero per cent interest rate and the maximum amount traders were allowed to withdraw was $10 million per person.

Disgraced FTX CEO Sam Bankman-Fried has started a chain reaction in cryptocurrency that has seen many exchanges struggle to stay afloat.

Mr Zhou’s tweet caused a flurry of concern from crypto enthusiasts on Twitter, with one user noting “Even Bybit is laying off their worker

Just three days earlier, on December 1, Mr Zhou released a statement on his company’s blog that said he was “bullish” about the future.

“Crypto is resilient,” he wrote.

“Many of those looking for us to fail, have been disappointed. The industry is bigger than one rogue actor and we have shown we can weather aftershock, after aftershock. We shall build back: bigger, better and stronger.

“At Bybit, we’re bullish, and see this as the start of much greater transparency in the industry and a way to help remove inefficiency in the wider crypto market.”

Cryptocurrency has been in a winter all year, and recent events mean it is unlikely to thaw any time soon.

FTX’s collapse

FTX, a $US32 billion ($A47 billion) cryptocurrency exchange, filed for chapter 11 bankruptcy less than two weeks ago, along with around 130 affiliated entities, including controversial trading firm Alameda Research, which is alleged to have played a central role in the implosion.

Disgraced FTX founder Sam Bankman-Fried told former employees he is “deeply sorry” about the implosion of his crypto exchange – but continued to point the finger at the company’s bankruptcy filing, insisting that he could have saved the platform if given enough time.

He faces criminal investigation in the Bahamas and a potential trip to the US for questioning over the disappearance of billions of dollars in customer funds.

In Australia, administrators have uncovered $A3 million in the accounts of FTX Australia, which allowed trading and a further $A39 million in the accounts of FTX Express that was used for local customers to purchase crypto in Aussie dollars.