This article comes fromThe Block, original author: Kristin Majcher

Odaily Translator |

Odaily Translator |

Argentinian cryptocurrency app Lemon Cash has laid off around 100 people, or 38% of its workforce.

Several crypto companies headquartered in Latin America announced large-scale layoffs this year, including Bitso, Buenbit and 2TM, the parent company of Brazilian crypto exchange Mercado Bitcoin.

Lemon Cash CEO Marcelo Cavazzoli said the Latin American fintech sector is likely to continue laying off workers as companies adapt to a tough market and funding environment. Companies that specialize in cryptocurrencies may have a better life because of higher profit margins, he added.

"Companies that don't adjust now, in the next 12 months, 10 months, when they try to raise capital, they will adjust," Cavazzoli said, "and they will be even worse off because the rest of their life cycle (runway ) will be shorter and more difficult."

The news comes amid the knock-on effects of FTX’s bankruptcy filing, coupled with a plunge in cryptocurrency market prices over the past year. While venture capital funding has been plentiful in previous years, Cavazzoli cautions against getting too high hopes for the future.

In an interview, Cavazzoli said, “There is a big investment wave in Latin America from the venture capital industry, not only in the crypto space, but in the technology field in general, and there is also a lot of investment in fintech. I think this makes the technology industry in Latin America. A little too reliant on further financing."

Lemon Cash is an app with more than 1.6 million users in Argentina that allows users to buy and sell cryptocurrencies and earn weekly income by holding cryptocurrencies in the app. The company also issues more than 760,000 Visa cards that allow users to automatically convert cryptocurrencies into local currencies. Additionally, Lemon Cash has minted over 435,000 “Lemmy” NFTs on OpenSea.

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Small impact, but not unscathed

FTX Ventures participated in a very small percentage of its Series A extension round, Cavazzoli said. Lemon also holds a negligible sum in Alameda that is not expected to be recovered. He declined to disclose the amount due to the ongoing liquidation.

Cavazzoli emphasized that the FTX bankruptcy had no impact on Lemon users and that the recent layoffs were planned in advance.

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Looking forward to next year

Cavazzoli expects three major trends to emerge in 2023 as products innovate: customers will demand transparency from centralized exchanges; businesses will need to demonstrate sustainability to weather the ongoing bear market; Web3 adoption will be a major focus .

What happened to FTX inspired Cavazzoli to think about how to increase transparency in the Lemon Cash App and the industry as a whole.