The bad news continues to roll in for the bruised fintech sector, with Malaysian savings app HelloGold the latest to throw in the towel and cryptocurrency platform Luno slashing 35% of its workforce.
HelloGold, which recently expanded into Africa and Thailand, is shuttering its business after failing to meet financial targets.
Users have been given until 2nd February 2023 to withdraw their funds. Any gold that remains on account will be sold and funds will be transferred back to users within five working days.
“We have not been able to get it to a level of customer activity to make it profitable it didn’t make it make sense to keep it going,” Robin Lee, CEO and co-founder of HelloGold, told Fintech News Malaysia, “so we are closing it down and we are pivoting to a B2B model.”
Eslewhere, Luno, the first digital assets exchange to win approval from Malaysia's Securities Commission, is feeling the chill winds of the crypto-winter, announcing plans to cull 330 employees, or 35% of is workfroce.
London-based Luno was acquired by New York-based Digital Currency Group in September 2020, which also owned cryptocurrency lender Genesis that filed for bankruptcy protection last week.
In a memo to employees, CEO Marcus Swanepoel blames turbulent markets and the blowback from the FTX bankruptcy that has lit a fire under other high profile digital currency businesses.
“This in turn has impacted us indirectly in a number of ways: on the capital side, a significantly more constrained funding environment, with the market’s focus shifting from long term investment to shorter term profitability, and on the operating side, a negative impact on market sentiment and consequently on growth and revenue for our business, along with all of our peers and competitors,” Swanepoel explains. “While we anticipated a downturn and proactively planned ahead with a business and funding model that can be resilient to some of these factors, the sheer scale and speed of all of this happening, and all at the same time, has put significant strain on our original plan.”