Derivatives-focused crypto exchange BitMEX has laid off about 75 employees, or a quarter of the company’s staff, days after its founders’ plans to acquire a German bank fell through. Staff learned of the cuts last week, The Block reported.
A spokesperson for BitMEX told The Block that the platform will continue to operate as normal as the company “streamline[s] for the next phase of our business.”
BitMEX CEO Alexander Höptner and CFO Stephan Lutz had announced in January that they planned to buy Bankhaus von der Heydt, which is one of Germany’s oldest lenders. They intended to acquire the bank through the entity BXM Operations, which the pair co-founded. German media first reported last week that both parties had mutually agreed not to go through with the transaction, which BitMEX later confirmed, though the company did not share details about why.
Founded in 1754, Munich-based Bankhaus von der Heydt is one of the first regulated institutions in Germany to offer digital asset services, according to Coindesk.
The layoffs come weeks after BitMEX’s co-founders Arthur Hayes, Ben Delo and Samuel Reed agreed to pay fines of $10 million each for deliberately failing to establish basic anti-money-laundering policies. The co-founders allowed BitMEX to operate in the shadow of the financial markets, Damian Williams, U.S. Attorney for the Southern District of New York, wrote in a statement.
Hayes stepped down from his prior role as CEO of BitMEX in October 2020, though sources told The Block that he played a role in the layoffs, in part through his support of BitMEX pivoting away from its core focus on derivatives.
The exchange, formerly known as a bitcoin-only derivatives platform, has expanded into Ethereum products and added offerings in spot trading, brokerage, custody and educational content as part of the pivot, which began in late 2020 when Höptner joined to replace Hayes as CEO.
It’s been adding these new capabilities, and considered the acquisition, as part of a bid to re-establish itself as one of the top 10 crypto exchanges by volume. BitMEX has seen a total of $1.34 billion in volume traded, compared to $69.4 billion on Binance, the world’s largest crypto exchange by that metric, according to crypto data provider Nomics.
With just three-fourths of its staff still in place after the cuts, it remains to be seen whether BitMEX’s efforts to lure more traders onto its platform will be fruitful.