Software engineer receives devastating email from would-be crytpo employer

A devastating story has emerged in the aftermath of major lay-offs across the US as the cryptocurrency market continues to plunge.

The once-booming world of cryptocurrency has seemingly begun an unforeseen and rapid descent, marked by major staff cuts across several of the main trading companies.

One victim in the massive lay-offs announced recently by US-based exchange Coinbase has spoken out, claiming his entire career is likely to plunge as a direct result of the company.

Hao Jia told CNN Business this week he knocked back an offer to work at tech firm Oracle in favour of an offer in early April to be a software engineer for Coinbase.

Last week however, he received an email informing him he was no longer wanted for the role.

As an international student, Mr Jia had been relying on the position to keep his visa.

“I’m an international student, and I need to keep my visa,” he told the publication.

“Now, after Coinbase, I prefer to go to a bigger company because I worry about my visa.”

Coinbase earlier this week announced it would be sacking 18 per cent of its staff as a result of a looming recession and “crypto winter”.

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A victim of Coinbase’s cutbacks has spoken out about the life-changing email he received. Picture: Michael Nagle/Bloomberg

It blamed overly rapid expansion and tight economic conditions for the need to cut about 1100 positions, with co-founder and chief executive Brian Armstrong announcing the “difficult decision” in an email to staff on Tuesday.

“We appear to be entering a recession after a 10+ year economic boom,” he wrote.

“A recession could lead to another crypto winter, and could last for an extended period. In past crypto winters, trading revenue (our largest revenue source) has declined significantly. While it’s hard to predict the economy or the markets, we always plan for the worst so we can operate the business through any environment.”

It came as bitcoin fell below $US21,000 ($A30,445) – nearing levels last seen in December 2020 and nearly 70 per cent down from its all-time high in November 2021 of $US67,802 ($A98,299) – while the broader cryptocurrency market fell below $US1 trillion ($A1.45 trillion), down from $US3 trillion ($A4.35 trillion) at its peak, according to Coinmarketcap.

Crypto prices have been falling since November but the correction turned into a rout last month with the collapse of the terra “stablecoin”, which was supposed to be pegged to the US dollar, and its sister token luna.

Co-founder and chief executive Brian Armstrong announced the ‘difficult decision’ in an email to staff on Tuesday. Picture: Michael Short/Bloomberg

Several other start-ups have also made dramatic cut backs, including Crypto.com, which laid off 260 workers – equal to five per cent of its workforce.

Gemini Exchange will be laying off 10 per cent of its workforce, while BlockFi said it would cut 20 per cent of its workforce.

The selling panic resumed again this week when one of the largest crypto lending platforms, UK-based Celsius Network, told users on Sunday night it was suspending all withdrawals, swaps and transfers between accounts due to “extreme market conditions”.

As the price of bitcoin crashed, Binance, the world’s largest crypto exchange by trading volume, added fuel to the fire on Monday when it announced a temporary freeze on withdrawals “due to a struck transaction”.

The brutal sell-off in the cryptocurrency market comes as central banks begin aggressively raising interest rates to combat skyrocketing inflation, causing investors to pull out of riskier assets and sending stock markets tumbling.

Coinbase had already warned in mid-May that its number of active users was falling. The group posted a net loss of $US430 million ($A623 million) in the first quarter of 2022.