The fintech sector continues to face challenges, with the Malaysian savings app HelloGold becoming the latest to close operations and cryptocurrency platform Luno reducing its workforce by 35%.
HelloGold, which had recently expanded into Africa and Thailand, is shutting down due to its inability to meet financial targets. Users have until February 2, 2023, to withdraw their funds. Any remaining gold in accounts will be sold, and funds will be returned to users within five working days. CEO and co-founder Robin Lee stated, “We have not been able to get it to a level of customer activity to make it profitable. It didn’t make sense to keep it going, so we are closing it down and pivoting to a B2B model.”
Meanwhile, Luno, the first digital assets exchange to obtain approval from Malaysia’s Securities Commission, is affected by the ongoing challenges in the cryptocurrency market. The company has announced plans to lay off 330 employees, accounting for 35% of its workforce. Luno, which is based in London and was acquired by New York-based Digital Currency Group in September 2020, faces repercussions from the recent bankruptcy of cryptocurrency lender Genesis.
In a memo to employees, CEO Marcus Swanepoel cited the turbulent markets and the fallout from the FTX bankruptcy, which has impacted several major digital currency companies. He explained, “This has resulted in a significantly more constrained funding environment, with a shift in market focus from long-term investment to short-term profitability, negatively affecting growth and revenue for our business, along with all of our peers and competitors. While we anticipated a downturn and proactively planned for it with a resilient business and funding model, the scale and speed of these developments have put significant strain on our original plan.”