Robinhood Lays Off 23 Percent of Its Staff, Blaming Crypto Meltdown

“Everyone over-hired — Coinbase over-hired, Robinhood over-hired. When money was easy, they were just hiring, hiring, hiring,” said Dan Dolev, a senior analyst at Mizuho. “I’m not surprised to see these cuts.”

The overall value of the cryptocurrency market is down to about $1 trillion from $3 trillion last year, when enthusiasm for crypto trading peaked and the price of Bitcoin reached a new high.

Robinhood has been working to build out its crypto arm this year, listing new coins and rolling out a crypto wallet product. “The one thing that I liked the least about Robinhood is their crypto exposure,” Mr. Dolev said. “Anything that has no intrinsic value is always prone to problems.”

Also on Tuesday, the New York State Department of Financial Services announced it was fining Robinhood’s crypto operation $30 million over violations of its anti-money laundering and cybersecurity regulations.

“As its business grew, Robinhood Crypto failed to invest the proper resources and attention to develop and maintain a culture of compliance,” Adrienne A. Harris, the superintendent of financial services, said in a statement.

Cheryl Crumpton, associate general counsel at Robinhood, said in a statement that the company was “pleased” the settlement had been finalized. “We have made significant progress building industry-leading legal, compliance, and cybersecurity programs, and will continue to prioritize this work to best serve our customers,” she said.

Article source: https://www.nytimes.com/2022/08/02/business/robinhood-layoffs.html