CoinMarketCap News, Jan 11: Cuts, Courts and Calls to Resign — Another Gloomy Day in Crypto

What a difference a year makes. Back in February 2022, Brian Armstrong had boasted that Coinbase was planning to hire 2,000 new staff by the end of the year. Instead, he's laid off more than 2,000. The exchange has cut another 20% of its workforce — 950 roles — in the second brutal round of layoffs during the bear market. In a blog post, Armstrong admitted that Coinbase, alongside most tech firms, "became too focused on growing headcount as a metric for success." He went on to warn of challenging conditions because of the broader economic downturn and fallout from "unscrupulous actors in the industry" — a not-so-subtle dig at FTX. While he said crypto isn't going anywhere, he added: "There could still be further contagion."

FTX's former head of engineering is trying to cut a plea deal with federal prosecutors as an investigation into the exchange's collapse continues, according to Bloomberg. If successful, Nishad Singh would become the third top executive to testify against Sam Bankman-Fried — leaving the 30-year-old entrepreneur increasingly isolated. While no charges have been filed, reports have tied Singh to code used to hide the transfers between FTX and sister trading firm Alameda Research. Regulators allege that Alameda was given a "virtually unlimited line of credit" for losing bets, with FTX customers ultimately picking up the tab. Singh was one of the executives who lived in a huge luxury penthouse with SBF in The Bahamas.

A man has been sentenced to 10 months in prison for using advance knowledge of cryptocurrencies that were about to be listed on Coinbase to make nearly $900,000. Nikhil Wahi's brother Ishan used to be a product manager on the exchange's asset listing team. While not as big as it once was, the "Coinbase effect" generally still sees new tokens get a substantial price bump after making their debut on the exchange. U.S. Attorney Damian Williams said: "This sentence makes clear that the cryptocurrency markets are not lawless. There are real consequences to illegal insider trading, wherever and whenever it occurs." The illegal trades involved nine cryptocurrencies, and in separate action, the SEC claims they're all securities.

Andrew Tate's quest to be freed from 30 days of detention in Romania has failed. The controversial influencer had appeared in court to challenge his arrest on charges of rape, human trafficking and organized crime — with his lawyer arguing there was insufficient evidence to justify his time in custody. Tate's brother Tristan and two Romanian women were also arrested by local officials in December. A tweet posted on Tate's account on Wednesday said: "They said I was at war with an enemy that didn’t exist … Today? They just say I was right." Prosecutors allege the real people who have paid the price are six victims in a case that saw them subjected to "acts of physical violence and mental coercion" — as well as sexual exploitation.

In his second angry open letter in 10 days, Gemini exchange co-founder Cameron Winklevoss upped his rhetoric — accusing Digital Currency Group CEO Barry Silbert of outright fraud. Winklevoss is calling for him to step down, and has warned: "There is no path forward as long as Barry Silbert remains CEO of DCG." All of this comes as 340,000 customers in the Gemini Earn program continue to be owed $900,000 by Genesis, which is one of DCG's subsidiaries. In a letter to shareholders on Tuesday, Silbert said 2022 had been the most difficult year of his life both personally and professionally, adding: "Bad actors and repeated blow-ups have wreaked havoc on our industry, with ripple effects extending far and wide."

A digital pound would not be used as a tool for surveillance, a government minister has said. Economic Secretary to the Treasury Andrew Griffith said individual privacy would be a top priority if a central bank digital currency was rolled out — but he stressed that no firm decision on launching one has been made. More than 100 countries are at some stage of investigating, testing or creating CBDCs — but China and Nigeria are the only major economies that actually have one in circulation. India and Turkey are both aiming to launch CBDCs this year, and the European Central Bank has been strongly advocating for a digital euro. The U.S. is at the undecided and not especially eager stage, although testing is ongoing and support is growing.