The stablecoin issuer Paxos is laying off 20% of its workforce and will focus on stablecoins and tokenizing real-world assets in the future
he stablecoin issuer Paxos recently laid off approximately 20% of its employees, affecting 65 staff members. This decision reduces Paxos' workforce to between 200 and 300 employees. The move comes despite Paxos holding over $500 million in assets on its balance sheet.
"We made a difficult decision to reduce our workforce by ~20%. We communicated this news directly to all 65 affected team members," wrote Paxos co-founder and CEO Charles Cascarilla in an email to employees on Tuesday.
In the email, Charles Cascarilla stated that Paxos has provided the following support to affected employees:
- 13 weeks of severance pay
- Three months of subsidized health insurance
- Three months of job placement assistance
- Two years extension to exercise vested stock options
Additionally, according to the email, the company also paid out second-quarter bonuses to those participating in the quarterly incentive program. Payment and benefits were provided to anyone approved for parental leave or sick leave, along with an exit package.
Paxos's future strategy focuses on
Charles Cascarilla stated that the layoffs "enable us to best execute on the enormous opportunities in tokenization and stablecoins," and the company is in "a very strong financial position to succeed."
Just a week before the layoffs, Paxos launched a regulated income stablecoin called Lift Dollar (USDL) through its entity Paxos International based in the UAE.
Charles Cascarilla also mentioned that "stablecoins will grow tenfold over the next few years and become a linchpin of an open financial system through tokenization."
Paxos plans to gradually phase out its commodity and securities settlement services, focusing more on tokenizing real-world assets and stablecoins.
#Paxos cuts 20% of staff although its potential remains strong
Mr. Charles Cascarilla, co-founder and CEO of Paxos, explained the decision to cut staff in an email to employees on June 12: “This allows the company to best take advantage of the huge opportunity ahead in… pic.twitter.com/6YFpgTNEci
— BWF Ventures (@BWFVentures) June 13, 2024
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The European Union is strengthening its regulatory measures on stablecoins
In the European Union, the Markets in Crypto-Assets (MiCA) regulation, which will come into effect in 2024, includes comprehensive rules specifically targeting stablecoins. MiCA mandates that stablecoin issuers hold adequate reserves and ensure robust governance for these tokens.
Additionally, the European Banking Authority (EBA) has issued new liquidity guidelines for stablecoin issuers. Under orders from the New York Department of Financial Services (NYDFS), BUSD, issued in collaboration between Paxos and Binance, ceased minting new tokens in February 2023 and was delisted on December 14, 2023. This is part of broader regulatory tightening around stablecoins, impacting their issuance and management practices.
In 2022, the collapse of TerraUSD and the Luna token resulted in investors losing approximately $40 billion. Terraform Labs and its former CEO Do Kwon were fined about $4.5 billion. This incident has also been a significant factor leading to increased regulatory scrutiny of stablecoins.
The prospects for stablecoins and tokenization of real-world assets
Stablecoins, due to their price stability, are suitable for cross-border payments, decentralized finance (DeFi), and other financial services. By reducing transaction costs and time, stablecoins are becoming more widely adopted.
More traditional financial institutions are entering the stablecoin market by issuing their own stablecoins or partnering with cryptocurrency companies. At the same time, global regulatory scrutiny of stablecoins is increasing, which enhances market trustworthiness and transparency.
Tokenization of real-world assets spans across multiple sectors such as real estate, art, commodities, and financial assets. This market has a tremendous scale and has the potential to transform the operations of traditional asset markets. Diversified and innovative market applications are expected to attract more investors, further promoting the development of the cryptocurrency market.
More news about paxos layoff
- Jun 10, 2024 2:13 pmPaxos International Launches Lift Dollar In ArgentinaAccording to Odaily, Paxos International, the UAE division of Paxos, has announced the sale of Lift Dollar (USDL) to Argentine users. The distribution is being carried out in partnership with Ripio, Buenbit, Manteca, and Plus Crypto. Previously, Paxos International had announced the launch of Lift Dollar (USDL), reportedly the first regulated stablecoin that offers daily returns to its holders. The stablecoin is expected to provide users with an average programmed interest rate of about 5% per day, consistent with the yield of US Treasury bonds. The USDL is regulated by the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM) and is priced in US dollars.
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- Mar 13, 2023 8:23 amPaxos: $250M in Signature BankPaxos, a stablecoin issuer, issued a statement stating that Paxos currently holds $250 million in Signature Bank and holds private deposit insurance, far exceeding its cash balance and the FDIC limit per account. Paxos said seeking private deposit insurance is one of its conservative approaches to managing client assets that exceed FDIC insurance limits. All Paxos stablecoin reserves are fully backed and can be redeemed 1:1 with U.S. dollars to customers at any time, Paxos said.
- Mar 02, 2023 10:23 pmPaxos: No material contact with SilvergatePaxos, the issuer of the U.S. dollar stablecoin BUSD, issued a statement to Silvergate Bank. Paxos stated that it has no substantive contact with Silvergate. Paxos’ top priority is always to protect its customers’ funds and assets, and to utilize a diverse network of banking partners.
- Feb 13, 2023 3:44 pmPaxos will stop issuing new BUSDAccording to the Wall Street Journal, the New York Department of Financial Services ordered Paxos to stop issuing new BUSD, but will continue to allow redemptions.
- Jan 24, 2023 9:27 amGemini plans another 10% layoffAccording to The Information, the cryptocurrency exchange Gemini plans to lay off another 10% of its staff. This layoff is Gemini's third round of layoffs in the past eight months. Gemini co-founder Cameron Winklevoss announced the layoffs on Slack. Cameron Winklevoss said persistently depressed macroeconomic conditions and fraud in the industry had left "no choice".
- Dec 23, 2022 11:21 amPaxos minted the same amount of PAXG as previously destroyed, this may be a spontaneous behavior of PaxosPeckShield said on Twitter that after the FTX attack address destroyed 11,184.18 PAXG, Paxos minted the same amount of PAXG and transferred it to a new address. This action may have destroyed the PAXG in the hacker's wallet for Paxos and minted the same amount of tokens to transfer to its treasury wallet.
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