Kraken, Bybit, and Swyftx, three cryptocurrency exchanges, announced layoffs as the fallout from the collapse of the FTX exchange spread.
KEY LESSONS
- The cryptocurrency exchanges Kraken, Bybit, and Swyftx have announced staff reductions among other crypto companies.
- A variety of cryptocurrency market participants are feeling the effects of the FTX collapse and a "deepening" bear market.
- The destiny of the bankrupt FTX and its creditors will be decided at bankruptcy hearings that have already started.
By trading volume, Kraken is the third-largest bitcoin exchange; thus, it will almost entirely eliminate its workforce. In a blog post, the San Francisco-based cryptocurrency exchange stated:
We're decreasing our global workforce by about 1,100 employees, or 30%, in order to meet the demands of the market. On December 4, Ben Zhou, CEO of the Dubai-based cryptocurrency exchange Bybit, tweeted a similar prognosis.
"Today's decision was challenging, but challenging times call for challenging choices. As part of an ongoing corporate reorganization as we move to refocus our efforts for the deepening bear market, I recently announced plans to decrease our employment."
The demise of cryptocurrency lender BlockFi and the market slump, according to the Bybit CEO in an interview with Bloomberg, are indications "that we are moving into an even colder winter than we had anticipated from both industry and market perspectives."
Since FTX's early November collapse and subsequent Chapter 11 bankruptcy filing, several cryptocurrency and technology companies throughout the world have also announced layoffs, including Lemon Cash, Unchained Capital, and Coinbase.
CEO of Binance Verified the Hack
Today, Changpeng Zhao, the CEO of Binance, tweeted: "Initial research shows that the developer private key was compromised, and the hacker modified the smart contract to a more harmful one." "Withdrawals were halted by Binance a few hours ago. A $3 million hacker transfer to our CEX was also frozen, he continued.
Ankr is a web platform and DeFi staking that enables users to develop and stake in the blockchain ecosystem quickly and economically. The Ankr team has acknowledged that the hackers stole approximately $5 million equivalent in BNB, Binance's native coin.
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Infinite Tokens Were Minted by Hackers
The attack was made possible because to the attackers' usage of the aBNBc token's smart contract to create a limitless supply of tokens. These tokens are Ankr's reward-generating staked version of Binance's BNB token.
The attacker created quadrillions of aBNBc tokens, exchanged 20 trillion of them for BNB, and then transferred them to Tornado Cash, a cryptocurrency mixer that enables users to break links in on-chain transactions and conceal the sender's identity. The attacker then started transferring the BNB tokens from the Binance chain to Ethereum by exchanging them for 5 million USDC. The price of Ankr dropped by 99.5% to $1.51 in response to the announcement.