Paradigm, a crypto derivative trading firm, has reduced the salaries of its workers by 15%. Notably, this OTC company is in no way affiliated with a popular crypto investment firm with the same name.
In a recent tweet, Paradigm noted that lowering salaries were better than employee layoffs. The company believed salary reduction would have a lesser effect on the company’s momentum.
Paradigm Lowers Workers’ Salaries
In addition, the crypto derivatives platform said the FTX contagion had affected its finances. According to Paradigm, the current market condition is terrible, and companies must work out ways to handle the situation.
Furthermore, Paradigm noted that the 15% salary slash would increase its financial flexibility while reducing its financial strain. Meanwhile, the latest FTX bankruptcy crisis, which spread to various parts of the crypto market, is still wreaking havoc everywhere.
Several crypto platforms went under as a result of the collapse. Matt Huang, the co-founder of Paradigm, expressed regret for investing in the company. Last month, Huang tweeted that he was shocked about the issue with FTX, Alameda Research, and Sam Bankman-Fried.
The ripple effect of the saga might be responsible for the company’s latest action. Before now, the company announced that it had written off all its investment in FTX as Zero.
Earlier in April, the company’s financial report revealed it has over $13.2 billion worth of assets under management. Also, the company’s website mentions FTX.US and FTX as part of its portfolio.
Hence, this answers why the company’s finances dwindled following FTX’s collapse. Per reports, Paradigm invested over $278 million in the now-bankrupt firm.
Employees Suffer As Crypto Market Downturn Continues
Meanwhile, there have been numerous layoffs in the crypto industry lately. Earlier in December, a fintech firm, Plaid, laid off over 260 workers.
The ongoing inflation and poor market condition had affected the company’s finances. According to Plaid, the company’s expenses exceeded the amount generated as revenue.
Hence, the company had to lay off some workers to reduce its expenses. Crypto firms that have laid off workers include Kraken and Coinbase. Kraken crypto exchange laid off 30% of its employees last month.
On November 9th, a news report revealed that the metaverse-driven company, Meta, had laid off over 11,000 workers. The metaverse firm struggled in 2022 due to poor market conditions.
Meanwhile, Alameda Research co-led a fundraising round for Paradigm last December. The company received $35 million from the funding round.