Coinbase CEO Brian Armstrong blames ‘unscrupulous actors’ for latest layoffs

Coinbase CEO Brian Armstrong appeared to blame disgraced FTX founder Sam Bankman-Fried after his struggling company announced another round of sweeping layoffs on Tuesday.

Armstrong, an outspoken critic of Bankman-Fried, referenced recent upheaval in the cryptocurrency industry stemming from FTX’s collapse while confirming Coinbase has slashed about 950 workers, or roughly 20% of its overall workforce.

“In 2022, the crypto market trended downwards along with the broader macroeconomy,” Armstrong said in a blog post. “We also saw the fallout from unscrupulous actors in the industry, and there could still be further contagion.”

FTX’s collapse into bankruptcy last November exacerbated existing problems for the cryptocurrency sector, which had already experienced a major drop in token prices and company valuations as risk-averse investors dumped their holdings.

Bankman-Fried pleaded not guilty to eight federal charges last month. The feds have accused the former billionaire wonder boy of illicitly using FTX customer funds to bankroll his lavish lifestyle and cover losses at his cryptocurrency hedge fund Alameda Research.

Sam Bankman-Fried
Sam Bankman-Fried has pleaded not guilty to eight federal charges.

The job cuts are the latest sign of growing turmoil at Coinbase, which had previously laid off more than 1,100 employees, or about 18% of its workforce, in June. At the time, Armstrong warned that a looming US recession “could lead to another crypto winter” that would hammer the sector for “an extended period.”

Armstrong said the latest round of cuts would allow Coinbase to slash its expenses by 25% this quarter compared to the previous quarter.

“I also want to be clear that, while some of the factors that have brought us to this point are beyond our control, accountability rests with me as the CEO,” Armstrong added.

The Coinbase boss also acknowledged that his firm “could have cut further” when it announced the first round of layoffs last year. Coinbase expects $149 million to $163 million in charges related to its internal restructuring, which is projected to be “substantially complete” by this summer.

Armstrong has been openly critical of Bankman-Fried since FTX’s downfall.

In December, Armstrong accused the media of treating the FTX founder with “kid gloves” despite the allegations that he bilked customers out of billions of dollars.

Sam Bankman-Fried
Sam Bankman-Fried is accused of bilking FTX customers out of billions.
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 When Bankman-Fried embarked on a media apology tour last year and gave interviews with several major publications, Armstrong called the whole situation “pretty bizarre.”

“I mean, this guy just committed a $10 billion fraud, and why is he getting treated with kid gloves?” Armstrong said during an interview with tech newsletter Stratechery.