Several professionals working in BitGo’s marketing and sales departments have been laid off, according to sources familiar with the matter. The layoffs are the latest to hit the blockchain and crypto industry, as other companies have also let their staff members go due to the Coronavirus (COVID-19) outbreak and resulting economic challenges.
Blockchain security and analytic companies Chainalysis, CipherTrace, and Elliptic have also laid off staff members. Some employees are still working but their salaries have been reduced because of the negative economic impact created by the Coronavirus pandemic.
In statements shared with The Block, a BitGo spokesperson noted:
“BitGo’s evolution to become a digital asset financial services firm for the institutional market has accelerated with two acquisitions in the last quarter. As we move into new markets with new products and services, we are making changes to strengthen the business and reorganize our teams.”
The cryptocurrency custodian added:
“We have made the difficult decision to let go of a small number of people totaling 12% of our workforce. It is never easy to make a decision like this and we have deep gratitude for the contributions and talent of those affected.”
The layoffs at BitGo have come after the company acquired Lumina, a tax management business. The digital currency custody provider has also acquired Harbor, an established security token (STO) platform. BitGo, Harbor, and Lumina have received investments from David Sacks, who manages Craft Ventures, a leading VC company.
BitGo’s management has been trying to expand and diversify the company’s business. Earlier this year, the company introduced its lending business.
In October 2019, BitGo acquired staking infrastructure solution provider Hedge.
BitGo might (according to sources) now be planning to develop a full-scale prime brokerage service that will allow its custody business customers to perform trades across several different markets.
Sources have questioned BitGo’s new business strategy, which mainly involves branching out into lending and trading. If the custodian begins providing products and services in these sectors, then it would be competing directly against many of its existing wallet clients.
BitGo has received investments from Goldman Sachs and Mike Novogratz’s Galaxy Digital, a full-service crypto merchant bank.
The companies invested a total of $15 million into BitGo’s Series B funding round back in 2018.