A year after their USD 25 million Initial Coin Offering, the London-based digital asset exchange platform BlockEx has confirmed that it is laying off some of its staff.
Adam Leonard, the Chief Executive Officer at BlockEx, explained that the firm plans to reduce its manpower to ‘reduce burn.’ He also explained that some of the layoffs are natural as many products have finished. Leonard, however, did not highlight the numbers.
Despite the layoffs in store for the company, the CEO is optimistic about the future of BlockEx. He explained,
“We are not winding down the business and hope to have some good news next week.”
Notwithstanding the optimism, the reduction in manpower poses a big question about the company’s finances.
BlockEx had successfully raised as much as USD 25 million through ICO in 2018. The exchange’s selling point was to become the first-ever securities token issuer which is approved by EU’s regulatory body. The company had given potential investors access to the exchange’s token DAXT by applying strict KYC/AML procedures.
Investors had, at the time, the opportunity to opt out as the token sale was not finalized until the buyers had received the DAXT token.
Interestingly, when the prices of Ethereum declined last year, many investors did decide to back out of the ICO. Leonard further explained,
“In reality, out of the £20 million ($25 million) raised, we were actually left with just £5.5 million ($7 million) of available funds for the business go-forward basis.”
BlockEx’s woes started after the ICO market saw a major decline in the year 2018. As the platform had no new offerings, it resulted in the loss of revenue, as well as the price of the DAXT token. Leonard said,
“Most of the ICOs we contracted with killed their ICO or pushed it back into 2019.”
If that was not all, BlockEx faced another blow when a Blockchain advisory’s USD 8 million investment in the exchange did not come to fruition.
Unable to cope up with unfavourable market conditions and plummeting cryptocurrency prices, BlockEx could not reach the milestones it had laid in front of it.
BlockEx’s staff layoff is nothing new in the crypto business. We had earlier reported Bitmain’s plans to lay off 50% of its total staff, as well as the news of crypto tracking app Blockfolio’s firing of some of its employees.