NEW YORK–NYDIG, the company with which at least a half-dozen credit unions have partnered to offer crypto-services to their members, has laid off approximately one-third of its staff. The company said in a statement, however, that its balance sheet is the “strongest it has ever been.”
The company, which said the layoffs involved approximately 110 employees, said the move was made to cut expenses and to “narrow its focus to more-promising businesses,” according to multiple media reports.
The layoffs were followed by less than two weeks by an announcement NYDIG was also replacing its top two executives, CEO Robert Gutmann and President Yan Zhao. The executives, who will remain with NYDIG parent Stone Ridge Holdings Group, were replaced by Tejas Shah, formerly head of institutional finance, and Nate Conrad, global head of payments, respectively, according to the Wall Street Journal.
As CUToday.info has reported, credit unions that have partnered with NYDIG include UNIFY Financial, Idaho Central, Achieva, Stanford FCU, Visions FCU, Southland Credit Union. In nearly all cases, the credit unions are allowing members to buy and sell crypto through the solutions and do not hold the assets.
‘Record’ Revenue
According to the Journal report, NYDIG said in a statement it was on pace for record revenue this year, with sales up 130% during the first half, with Ross Stevens, NYDIG’s founder, saying, “The firm’s balance sheet is the strongest it’s ever been, and now we’re investing aggressively into a capital-starved market.”
The company was founded in 2017 as New York Digital Investment Group, and offers bitcoin trading, brokerage, custody and asset management services. In December, 2021, the company raised $1 billion in a funding round that valued it at more than $7 billion.
That valuation, however, was followed by a downturn in the market, with most digital assets shedding 75% of their value since that time.
Waiting on Regulators
“In addition, most banks have cooled down their interest in digital assets as they wait on regulators to issue better guidelines,” stated CoinGeek. “This combination has been lethal on NYDIG and has pushed it to layoffs.”
One person was quoted by CoinGeek as saying, “NYDIG put all their eggs in this banking strategy, but they realized that there was no way that these banks were ready. They blew through all this money telling a story that they would bring [BTC] to the masses.
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