UK’s Coinfloor Bitcoin Exchange to Slash Most of its Employees

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The UK’s oldest bitcoin exchange Coinfloor is about to slash its staff numbers in a blow to bitcoin as well as London’s blooming cryptocurrency industry, Financial News reported on October 8, 2018.

A Setback for the U.K.’s Fintech Industry

Coinfloor, the U.K.’s oldest bitcoin exchange established in 2013, is in the process of slashing most of its approximately 40 employees.

According to an October 8 report from Financial News, two people familiar with the matter have told the publication that the exchange is about to cut the majority of its staff, creating a severe setback to London’s fast-growing fintech industry.

And while Coinfloor is yet to issue an official press release regarding the matter, the exchange’s CEO did speak on the subject. Coinfloor’s chief executive, Obi Nwosu, confirmed the reductions were taking place but declined to comment on how many, Financial News reported.

Nwosu said that it was normal for any company to grow or make cuts depending on the market environment and that the exchange had “seen a significant change in trade volume across the market.”

“Coinfloor is currently undergoing a business restructure to focus on our competitive advantages in the marketplace and to best serve our clients. As part of this restructuring, we are making some staff changes and redundancies,” Nwosu said.

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The Market Says no

Coinfloor, which is backed by a former managing director at Goldman Sachs and Credit Suisse Adam Knight, as well as TransferWise founder Taavet Hinrikus, and venture capital firm Passion Capital, will be the first significant exchange in the U.K. that has introduced cuts as a response to shifts in the market.

According to Nwosu, Coinfloor has traded around $1 billion worth of bitcoin over the last 12 months. However, a large trading volume doesn’t seem to be enough to keep the company afloat. After last year’s bitcoin bull run (which saw the price go from under $1,000 at the beginning of 2017, to almost $20,000 at the end of the year), bitcoin businesses have started to rethink their business models, Forbes reported.

With around 200 cryptocurrency exchanges around the world, according to CoinMarketCap data, the market seems to be getting more crowded each day, leaving even the oldest, more established exchanges fighting for users and struggling to stay profitable.

Coinfloor’s downsizing and restructuring could also be consequences of the sea of bad reviews the company has gotten in the past months. It currently has two out of five stars on Trustpilot and an overall “poor” grade.

While most of the reviews cite speed and customer service as their main setbacks, others have pointed out that the company has withheld customers’ personal information even after their account registration was denied.

A few users have also pointed out that instead of dealing with complaints, Coinfloor had repeatedly flagged their Trustpilot reviews as “defamatory” and tried to get them removed from the website.