Mass layoffs and operational problems at a local exchange spark alerts among crypto investors

An Argentine exchange laid off a large part of its staff, raising concerns among cryptocurrency users. What happened and how to read the move?

By Pilar Wolffelt

11/24/2022 – 6:45 p.m.

This Thursday, a piece of news stirred up the local crypto world: one of the most recognized Argentine exchanges, Lemon Cash, fired 38% of its staff and that generated panic among the investors of the platform, who wanted to withdraw their funds almost compulsively. And it is that the crisis that this ecosystem has been going through throughout this year and the multiple cases of scams that have been known in recent times. How does the market decode this situation?

It is worth mentioning, on the one hand, that the fall of Bitcoin this year has been resounding. In fact, these days, it trades around $16,000 and many cryptocurrencies have negative returns in recent times. That hit international and local exchanges hard, which receive investment from abroad. And, on the other hand, as the investment and cryptocurrency expert Santiago Amat explains to iProfessional, “the collapse of the FTX crypto platform affected Lemon’s liquidity.” And it is that, months before going bankrupt, FTX had invested in that local exchange.

As expected, immediately the news of the massive layoffs in the company was linked to that episodebut from Lemon Cash they assured that the measure had already been planned for a long time and pointed out that “it comes in line with the path towards Lemon’s long-term sustainability and transparency“.

Lemon Cash: what the company said about the layoffs

And in this sense, they recognize that the noise that there is with the crypto world at this moment indicates that “The winter linked to investment rounds will be longer“. Thus, to counteract this trend, this measure is taken, which although they maintain that “it is very bad news, leave Lemon very solid financially for the next 30 months“.

Regarding this issue, some experts on Twitter explain that “companies like Lemon are startups, not SMEs” and this implies that in order to be profitable they have to grow aggressively.

If they don’t make these kinds of decisions, they eventually go bankrupt and fire 100% of the team. For this reason, this 2022 we saw massive layoffs in many tech companies, whether or not they are from the crypto industry, whether they are from Latam, Europe or the United States.“, justifies the Twitter user @franperez_co.

Cryptocurrencies have depreciated a lot in the last year.

Cryptocurrencies have depreciated a lot in the last year.

However, as soon as the news broke, Lemon Cash users got scared and immediately went out to withdraw their funds from the platform and that created a bottleneck for the Exchange.

“The measure of laying off their staff is taken so that Lemon Cash remains valid in the long term, but users began to oust the company on Twitter because there were problems in operations. Money transfers took a long time, some took up to four days,” Amat describes.

In the midst of the crisis of Bitcoin and other cryptos, Lemon Cash seeks not to die

From the Exchange, they responded that they had a great demand from users and, to bring peace of mind to the market and calm the waters, the company will announce today the extension of the series A for US$27.800 million, which added to that of US$16 300 million in 2021 will total US$44.100 million, one of the largest by an Argentine company in the crypto sector.

This step will add to the company’s decision to demonstrate its liquidity on the platform a few weeks ago by publishing the evolution of its assets so that the public can follow it. “This is an Exchange that has quite a good reputation, I don’t think it has lost it beyond this blow, but the company is looking to realign itself to maintain it,” explains Amat.

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