Middle East cryptocurrency exchange Rain, which is licensed by the Central Bank of Bahrain and operates across the Gulf, has cut “a lot” of jobs amid a market downturn.
Founded in 2017 by Abdullah Almoaiqel, AJ Nelson, Joseph Dallago and Yehia Badawy, it raised $110 million in series B funding in January, but has been affected by the volatility in the sector.
Mr Dallago said in a LinkedIn post that Rain would be looking to “emerge stronger in the coming months”.
“Crypto saw a meteoric rise at the start of 2021,” he said.
“This was fuelled in part by sustainable interest and enthusiasm for the unique capabilities of this technology, and in part by unsustainable rampant speculation.
“The volatility in the industry has been difficult to properly plan for, which has resulted in the unfortunate changes that we have had to make today.
“This year has been a time for self reflection, and it is an opportunity for the industry to focus on its fundamentals and build crypto into a legitimate financial system. We had to say goodbye to a lot of really talented team members.”
Rain has not given an exact number of employees that were terminated. It was known to have more than 400 employees at the start of the year.
The staff cuts were made to reflect the “operational needs and market conditions,” the company told Bloomberg.
“As a business we have had to adapt our future plans, given these difficult market conditions, to ensure we can navigate through this downturn,” it said.
The company offers its customers a platform to buy and sell cryptocurrencies, as well as custodian services to hold their assets.
Its funding round in January was led by San Francisco-based cryptocurrency-focused investment company Paradigm and Silicon Valley venture capital company Kleiner Perkins.
It also received backing from US-based Coinbase Ventures, Global Founders Capital, Middle East Venture Partners, Cadenza Ventures, Jimco and CMT Digital.
The company was planning to grow its team across the region and hoped to double in size.
Cryptocurrencies have suffered a bad year, experiencing what is known as a “crypto winter”. The sector has contracted to less than $1 trillion, or about a third of its record market value reached in November.
In June, Bitcoin, the biggest cryptocurrency on the market, fell to about $17,000, from a high of $68,990.90 in November.
This was down to FUD — or “fear, uncertainty and doubt”, an acronym used by cryptocurrency enthusiasts to dismiss negative information — which can lead to panic selling.
That was against the backdrop of 40-year high inflation, rising interest rates, recession fears and the collapse of the stable coin Luna when it unpegged from the US dollar, wiping out more than $17bn in cryptocurrency value in May.
Bitcoin fell below $20,000 for a sixth consecutive trading session on Friday, the longest stretch of days that it has dipped under that level since the market was rocked by turmoil in July.
Rain did not immediately respond to a request for comment by The National.