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As its US proprietor suffers $1bn loss, Luno strikes to retrench 35% of employees


SA cryptocurrency trade Luno says funds stay accessible to clients at any time.

Gallo Pictures/Misha Jordaan

The US proprietor of South African-founded cryptocurrency trade Luno reported a lack of $1.1 billion (R20 billion, at present trade charges) final yr, in line with US media studies.

Cryptocurrency information web site CoinDesk reported that the Digital Forex Group (DCG) was hit by falling cryptocurrency costs and the chapter safety submitting of its Genesis lending arm. 

CoinDesk, like Luno, is a subsidiary of DCG, which additionally owns greater than 200 crypto-related corporations, together with Genesis, which is among the largest lenders of cryptocurrencies on the planet. Earlier this yr, Genesis filed for chapter in New York.

The corporate confronted a liquidity crunch on the finish of final yr, and abruptly stopped all withdrawals and new loans. This got here after a meltdown within the crypto market in 2022, with a few of the greatest cryptocurrencies dropping 50% to 60% of their worth. As well as, Genesis was hit by the spectacular collapse of FTX.

Genesis held $175 million (round R3 billion) with the bankrupt crypto trade, which it now cannot entry.

Final month, Genesis was additionally sued by the US monetary authorities for allegedly promoting unregistered investments.

Luno just lately introduced that it’ll retrench 35% of its labour drive, together with staff in South Africa. As soon as the retrenchments are full, the trade could have round 700 workers members.

Whereas Luno’s head workplace is in London, it was based in South Africa in 2013 and stays the nation’s greatest cryptocurrency platform. Up to now 10 years it has grown to 10 million clients in 40 nations. 

‘Important pressure’ 

Luno SA nation supervisor Christo de Wit mentioned that final yr’s downturn within the tech sector, the crash within the value of cryptocurrencies, and the chapter of FTX Buying and selling meant Luno needed to institute job cuts.  

“Whereas we anticipated a downturn and proactively deliberate forward with a enterprise and funding mannequin …. the sheer scale and velocity of all of this taking place, and all on the similar time, put vital pressure on our unique plan,” he mentioned final month. 

READ | Luno’s US proprietor is in a multitude. The place does that depart its SA shoppers?

“Lowering worker headcount in all of our markets was wanted to be arrange for achievement going ahead.”

De Wit mentioned that issues at DCG had not impacted the flexibility of Luno shoppers to withdraw funds. 

“Luno holds clients’ funds safely and securely independently of DCG and people funds stay accessible to clients at any time,” he mentioned final month.

Luno is run independently from its father or mother firm, mentioned De Wit, and buyer funds are segregated from company funds. 

“Luno’s revealed proof of reserves verification confirms that we maintain all buyer cryptocurrency on a 1:1 foundation.”

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