NYDIG, a digital asset manager targeting institutional investors, quietly laid off a third of its employees in September, sources at the company have revealed. The layoffs, which the company has yet to acknowledge, came despite the firm claiming it had its most profitable year yet.
NYDIG is a subsidiary of Stone Ridge Holdings, a New York-based asset management firm that caters to institutional investors. It was established in 2017 to introduce BTC to Wall Street and most major banks and has raised billions of dollars since then.
But while the management openly claimed to be having the best year yet, sources told the Wall Street Journal that the company laid off over 110 employees last month, representing about a third of its workforce.
NYDIG executives informed the staff members to be laid off in late September, citing the need to cut down operating costs and trim its operations to focus on the more promising businesses, the sources say.
The layoffs came just days before the company revealed that it had raised $720 million from 59 investors to invest in digital assets. Around the same time, the company announced that its President, Yan Zhao, and CEO, Robert Gutmann, would be stepping down. The two, who remain with NYDIG’s parent company, were replaced by Nate Conrad and Tejas Shah as president and CEO, respectively.
NYDIG was firmly focused on taking BTC to the banks in a campaign it dubbed “Bitcoin for all.” In December last year, it raised $1 billion at a $7 billion valuation towards this.
However, the funding was followed by a downturn in the market, with most digital assets shedding 75% of their value. In addition, most banks have cooled down their interest in digital assets as they wait on regulators to issue better guidelines. This combination has been lethal on NYDIG and has pushed it to layoffs.
“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. Their core strategy was blundered,” a former employee told one outlet.
The company joins several others who have had to trim their staff as the bear market bites. Just recently, it was revealed that Crypto.com grossly understated its layoffs, claiming that it was around 260 while it had dismissed over 2,000 people.
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