Crypto crash widens a divide: 'Those with money will end up being fine' - Aliens: AI Crypto News & Markets Updates
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Crypto crash widens a divide: 'Those with money will end up being fine'

PublisherPublisher
The Straits Times

Thu, Jun 30, 2022

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The Winklevosses, who are 40, were moonlighting as rockers just weeks after their US$7 billion (S$9.75 billion) company, Gemini, which offers a platform for buying and selling digital currencies, laid off 10 per cent of its staff.

Since early May, more than US$700 billion has been wiped out in a devastating crypto crash, plunging investors into financial ruin and forcing companies like Gemini to slash costs.

But for all those supposedly egalitarian principles, crypto's collapse has revealed a yawning divide: As employees of crypto companies lose their jobs and ordinary investors suffer huge losses, top executives have emerged relatively unscathed.

Others run publicly traded crypto companies and cashed out of their stock or invested in real estate.

Thousands also flocked to work for crypto companies, thinking it was a ticket to new riches.

As of this week, the total was about US$76 billion, but most of the loss was suffered by a single billionaire, Zhao Changpeng, CEO of the crypto exchange Binance, whose US$65 billion fortune shrank to US$17.4 billion.

"The smaller people get taken advantage of." The uneven effects of the crash are evident even within crypto companies.

Coinbase, the largest crypto exchange in the United States, went public in April 2021 when interest in digital currencies was surging.

This month, as Coinbase grappled with falling prices and declining consumer interest in crypto, it laid off 18 per cent of its staff, or about 1,100 workers.

Mr Armstrong said the company had "over-hired." Coinbase also rescinded hundreds of job offers.

She said that many of the share sales were part of the direct-listing process and that executives "maintain large positions in the company reflecting their commitment." Still, unlike Coinbase, the vast majority of crypto companies are privately held, meaning their value is less tied to day-to-day price swings.

"My personal net worth probably hasn't been affected too much," said Ivan Soto-Wright, CEO of MoonPay, a US$3.4 billion crypto payments start-up.

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