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Correction: This article has been updated to reflect that Paradigm, the crypto derivatives platform, has cut employees' salaries, not Paradigm the venture capital firm.
Paradigm, a crypto derivatives platform, is cutting its employees’ salaries by 15%, citing dismal market conditions.
“Post FTX's collapse, it is clear the contagion is deep and wide and like many of our clients and peers, we are not immune,” the company said in a statement posted to Twitter on Thursday. “Salary cuts reduce the need for layoffs seen across the ecosystem and have a lesser impact on org momentum.”
"These are tough times, but we must do the hard thing and retain the financial flexibility to navigate the turbulent times we find ourselves in as an industry," it added.
1/ We made the difficult decision to cut salaries across the board by 15% this week 😢
Post FTX's collapse, it is clear the contagion is deep and wide and like many of our clients and peers, we are not immune
— Paradigm (@tradeparadigm) December 14, 2022
The wider crypto industry has seen an increasing number of layoffs over the past month. There have been deep cuts at a number of exchanges and trading platforms, including Coinbase (18%), Opensea (20%), and Kraken (30%).
Derivatives trading has taken a particular beating following the collapse of FTX last month. The exchange, founded by the now-disgraced Sam Bankman-Fried, allegedly appropriated billions of dollars of customer funds to support the uncollateralized margin trading of its sister company, Alameda Research.
The unsecured borrowing eventually blew up the exchange, along with great swathes of the crypto industry.
The chaos saw a knock-on effect on derivatives platforms, with Binance, the world’s largest exchange, suffering record withdrawals earlier this week amid fears over its solvency.
Institutional funds have also suffered. Shares in Grayscale’s flagship GBTC trust, a way for investors to gain exposure to Bitcoin without investing in it directly, plummeted to an all-time low earlier this week, deepening the trust’s “discount” to the underlying Bitcoin.
