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Cryptocurrency lender BlockFi, which just weeks ago finalized a $400 million loan and potential acquisition terms with crypto exchange FTX, is offering employees buyouts as a way to quietly reduce headcount. The move comes one month after cutting 20% of its staff.
A BlockFi employee told Decrypt that the company is offering employees 10 weeks paid leave and 10 weeks of continued health insurance (commonly referred to as COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act) to resign. The source also said that the company has assured employees that if they accept the buyout, they will be eligible for unemployment.
BlockFi confirmed that employees were being offered buyouts in an emailed statement to Decrypt.
"BlockFi initiated a voluntary separation program to right-size our organization for the current market environment," a company spokesperson told Decrypt. "This is not an action we took lightly and want to ensure that employees have resources to consider the decision that is right for them."
Since inking the deal with Sam Bankman-Fried’s FTX on July 1, Prince has been steadfast in insisting that all is well at BlockFi.
In fact, last week, Prince said he thinks BlockFi shouldn’t be compared to its insolvent former competitors: brokerage firm Voyager and lender Celsius. He also said the company raised its interest rates in July and teased that they have “exciting stuff in the pipeline.”
The next day, he responded to Pantera Capital CEO Dan Morehead on Twitter, who himself was responding to a Wall Street Journal essay declaring that decentralized finance “has an existential problem.”
In his blog post, Morehead had called BlockFi a “centralized finance firm.” Prince replied to Morehead, “They were/are bankrupt or insolvent - we are not," referring to Celsius and Lehman Brothers, the global financial services firm that collapsed in 2008 because of its reliance on securities backed by subprime mortgages that went into default.
But Prince had a more conciliatory tone last month when the company announced layoffs.
On June 13, BlockFi cut headcount by 20%, going from 850 employees to about 680, according to a Twitter thread posted by CEO Zac Prince.
Prince went on to say that the company had been working to cut spending on marketing and vendors, reduce executive compensation and slowing down its hiring.
“Like many others in tech, we’ve been impacted by the dramatic shift in macroeconomic conditions, which have had a negative impact on our growth rate,” Prince wrote in a Twitter thread. “As a result, our number one goal has been to achieve profitability so that we can extend our runway and control our destiny.”
Now, as Crypto Winter drags on, BlockFi is getting smaller again.