Exchange Updates – Binance WazirX Dispute Escalates, Kraken Pulls Out of Abu Dhabi, Bittrex Trims Staff, and More

January's price returns for the digital assets market painted a streak of sanguine among participants recouping from compounded losses towards the end of Q4. Still, reverberations of the protracted market depression that was aggravated by the collapse of FTX and its affiliated firms in November are yet to recede from view. More than 14 firms operating within the crypto sector announced job cuts across January affecting more than 2,900 employees in various capacities.

Crypto and tech companies have continued slashing workforce sizes this month, albeit not aggressively, to adjust to deteriorated market conditions and brace for a depressed outturn. Bittrex, the latest entrant to a list that includes Kraken and Crypto.com, communicated this week dismissals affecting some of its employees.

In other exchange news, Binance on Friday followed through on its Jan 26 ultimatum to Indian exchange WazirX and its operating company Zanmai Labs. Binance announced the termination of wallet services with the Mumbai-headquartered trading platform after it turned a deaf ear to demands outlined in an initial post. WazirX previously accused Binance of blackmail meant to coerce a retraction of past remarks on the sticking point – the nature of the relationship between the exchanges.

Here is a roundup of other headlines around crypto exchanges this week:

Layoffs spree extends into private sector, Bittrex and Chainalysis join the bandwagon

This week, Bittrex communicated a staff cutback on Feb 1 (Wednesday) as its reviews its operational strategy. The Seattle-based exchange made headlines last October after being fined $29 million for failing to restrict access to its platform by users from sanctioned jurisdictions. The Worker Adjustment and Retraining Notification resource page from the US Employment Security Department shows that the exchange has let go permanently 83 employees. The layoff trimmed down the exchange's employee size to 284 staffers, per the company's LinkedIn page.

Last month, Singapore-based exchange Crypto.com announced a layoff affecting a fifth of its employees, while Coinbase axed 950 employees in addition to winding operations in the Japanese market around the same time. London-headquartered crypto trading platform Luno also informed a similar redundancy affecting roughly 35% of its global employee size in January. In addition to paring down its workforce to around 960 at present, the independently operating DCG subsidiary conveyed it is phasing down some of its domestic and international businesses.

Kraken winds down operations in Abu Dhabi

Kraken exchange confirmed on Thursday it is closing down Abu Dhabi offices as it exits the market. The decision to discontinue operations in the Middle East and North Africa (MENA) region directly affected eight staff members. The latest development follows a similar announcement of halting crypto services in Japan for the second time in less than five years. The exit from Abu Dhabi comes only ten months after the exchange became the first to win full approval for its MENA subsidiary from the Abu Dhabi Global Market.

In other related news, blockchain data and insights provider Chainalysis said on Tuesday that it is trimming its headcount and reshuffling the remaining team to cope with the suppressed market and business contexts. The ‘reorganization' will affect roughly 5% of its staff, mainly those in sales. The blockchain analysis and forensics firm chalked up the ‘restructuring' decision to a need to prioritize products development and focus on public clients. Protocol Labs, the research and development laboratory behind Filecoin, also reduced the size of its team this week. The project's co-founder Juan Benet communicated in a Feb 3 post parting ways with up to 21% of its staff (89 Labbers) as part of measures to shape its team “against the most impactful and business-critical efforts.” Benet, who leads the product-development lab, said the workforce adjustment would help it weather the prevailing macro winter.

Sorare to bring its NFT fantasy soccer game to the English Premier League in a $150M deal

Following deliberations that have lasted more than a year, digital trading card company Sorare this week secured a £120 million ($150 million) four-year deal to bring its NFT fantasy soccer game to the English Premier League. Sorare will mint and sell cards of league players, and yearly payments will be contingent on performances. The prestige and widely-followed soccer league procured, as part of the agreement, an option to acquire a stake in the crypto firm. Notably, the parties announced the deal against a distressed digital assets market which is significantly down from all-time highs, notwithstanding the mild rally in recent weeks.

Sorare CEO Nicolas Julia divulged that finalizing the deal took a while as the EPL had a pre-existing NFT licensing agreement. The game, once released, will enable fans worldwide to acquire immortalized versions of their favorite players on the blockchain. CityAM reported that the $4.3 billion Parisian NFT hub would include cards of players from all 20 clubs in the league competition, debuting a 1,111 Premier League player card NFT collection. The offerings are available for between £1 for the most economical cards to £1,000 for exclusive cards. However, these cards typically sell for significantly more, a case in point being a similar card of a current player in the league, Erling Haaland, which went for more than £500,000 last year.

Sorare's NFT trading platform utilizes the Ethereum blockchain to register each card as a distinct ERC-721 token, facilitating peer-to-peer transactions involving these unique tokens. Users can create a lineup of five players, with the total point value of the lineup derived from the represented players' real-world performance data. Premier League chief Richard Masters remarked on the unique digital cards as a way to connect and bring fans worldwide closer to the game. The fantasy sports game, whose free-to-play version is used by about 87% of its 3 million registered users, has previously collaborated with big names in the sport, including PSG duo Lionel Messi and Kylian Mbappe. In addition to its Premier League license, Sorare also holds licenses with La Liga, NBA, and MLB.

Bitzlato and Bithumb execs arrested this week

Spanish authorities on Thursday confirmed the successful operation leading to the arrest of three officials with links to Bitzlato, which has been the subject of enforcement action from US Department of Justice over money laundering charges. The trio taken in custody include the CEO, sales executive and marketing director. The other co-founder Anatoly Legkodymov was previously arrested in Miami last month.

In South Korea, police arrested Bithumb ex-chairman Kang Jong-Hyun who is accused of market manipulation and other charges. Elsewhere, UK-based crypto exchange Archax on Thursday launched a digital asset custody service, having previously secured approval from the Financial Conduct Authority (FCA), which largely oversees the financial markets domestically. The offering, developed in partnership with digital asset infrastructure company Metaco leverages the secure environment provided by IBM cloud computing service.

Binance to launch a crypto rewards card in Brazil in a joint venture with MasterCard

Binance earlier this week announced a partnership with financial services giant MasterCard that will bring a prepaid crypto card to Brazil. In the announcement post, the world's leading exchange remarked on the collaboration to launch the ‘Binance Card' as a move aimed at bridging the gap between digital assets and traditional finance. Brazil ranks as the largest economy in South America and among the exchange's top ten largest markets.

The prepaid card is being developed jointly with the payments processing technology company and issued by Dock. Currently in the beta phase, the card will be made “available in the coming weeks” to Brazilians opting for the service. Binance announced a similar initiative in Argentina last August– itself coming two years after another rollout in the European Economic Area. Cardholders will be able to settle bills at Mastercard merchants with Binance's stablecoin offering Binance USD and a dozen different crypto options, including Bitcoin, Ether, Cardano, Polygon and Solana.

“Brazil is an extremely relevant market for Binance and […] Payments is one of the first and most obvious use cases for crypto, yet adoption has a lot of room to grow. We believe the Binance Card is a significant step in encouraging wider crypto use and global adoption, and the openness of Brazilians to innovation makes the country a great market for this release,” Binance (Brazil) General Manager Guilherme Nazar said.

MasterCard Brazil's exec counterpart, Marcelo Tangioni, remarked on the country's readiness to adopt digital assets and view crypto as more than a speculation asset. Binance will charge a 0.9% conversion fee on the transactions processed in form of crypto. The exchange said it plans to introduce more cryptocurrency options and seek expansion to new markets beyond South America. Last year, Brazilian lawmakers passed a bill that legally recognizes crypto payments within the country, which the President at the time, Jair Bolsonaro, signed into law.

Exchange stock and tokens market

Coinbase (COIN) stock increased by almost 60% across January, reaching a multi-month high on Feb 3 before the market's close. The tokens of other centralized exchanges, including OKX and HTX, equally thrived last month, posting relatively decent gains against the sour theme arising from staff reductions, increased regulatory oversight, and court proceedings in the FTX bankruptcy case.

In the last three weeks, the crypto market has bounced to claim November levels before bankruptcy news around the FTX exchange delivered a setback to recovering prices post-Terra collapse. Remarking on the extended market downturn in a recent interview, Coinbase Head of Institutional Research David Duong noted that the muted price action in 2022 was an ineluctable reminder of the flipside of the volatility cryptocurrencies inherently bear. Duong added that thanks to the declining market, institutional investors have recognized that bear conditions are cyclical. The Coinbase exec also pointed out that while the FTX issue happened at the height of the crypto winter, institutional players have come to terms with the fact that such are repeated developments. He explained that investors have moved to lay foundations to trade the present cycle.