As crypto winter worsened, so did macroeconomic headwinds, such as Russia’s war in Ukraine and interest rate hikes by the Federal Reserve. Crypto companies, being the furthest out on the risk curve, were some of the first to substantially reduce their headcounts.
Coinbase laid off 1,100 employees, or 18% of its workforce; NFT marketplace OpenSea laid off 20%; exchange Blockchain.com laid off 25%; numerous other firms, from lenders to exchanges to startups, made cuts of various sizes through the summer months.
Crypto.com, previously one of the more notable exchanges thanks to its heavy marketing spend, reduced its headcount by over 2,000 employees, or between 30% and 40% of its workforce, as first reported by Ad Age. The cuts, which were far greater than the company publicly announced, were accompanied by numerous reductions to Crypto.com’s marketing partnerships.
Read more: Inside Crypto.com's marketing meltdown
A successful Merge
Amid the months of crypto contagion, one very positive event did occur: An update to the Ethereum blockchain, called “The Merge,” went through its final stage in mid-September, and upon completion, the network became 99.99% more energy efficient.
"The Merge" had been in planning for years, and its numerous phases of testing and retooling and testing again had stirred up a feeling that the update might not get completed at all. But once "The Merge" was deemed successful, many in the space were able to breathe a sigh of relief. Moreover, a lack of sustainability had always been a core complaint of Ethereum. With its new structure, however, the network not only showed that it can change for the better, but also that its community of developers and users was able to come together to actually make it happen.
Read more about “The Merge” here
Kim Kardashian pays the piper
In early October, Kim Kardashian was forced to pay the Securities and Exchange Commission (SEC) $1.26 million over an undisclosed promotion of a crypto asset. The token in question was called EthereumMax (emax), and the group behind the project paid Kardashian $250,000 to promote the coin to her many millions of Instagram followers in June 2021.
The SEC ruled Kardashian did not properly disclose that her posting about it was a paid promotion. While not the first crypto-touting celebrity to be fined by the SEC, Kardashian is definitely the most recognizable, and her punishment was a reality check to all crypto companies using celebs to partner with their projects.
Elon Musk’s Twitter takeover
While not strictly a crypto event, Elon Musk’s takeover of Twitter had immediate implications for the digital asset space. Musk is a figurehead in the crypto ecosystem (he persistently shills dogecoin and Tesla previously owned nearly $2 billion in bitcoin), and many believe that his ownership of the social media platform will result in future integrations with crypto technology, as well as a generally friendlier acceptance of the currencies.
Musk himself has already teased how Twitter might use crypto, including through dogecoin integration and a heavier focus on crypto payments.