Scaling Back Partnerships
Cryptocurrency exchange Crypto.com has reportedly reduced the scope of its sponsorship agreements with various sports organizations as the firm navigates through staff cuts and a significant market downturn. A recent report indicated that the exchange has reconsidered its contracts with major partners like the Angel City Football Club, the upcoming FIFA World Cup in Qatar, and Twitch Rivals. Allegations suggest that in some cases, Crypto.com is attempting to back out of deals entirely.
The Impact of Market Fluctuations
The news comes in the wake of the May market downturn, prompting significant changes in Crypto.com’s marketing strategy. According to tech reporter Asa Hiken, sources from within the company claim that they have begun reviewing their expensive sponsorship deals. Hiken noted, “The other shoe has dropped for a crypto firm that marketed really big when numbers were up. Now that the number is down, the firm is grappling with its own costly decisions.”
Specific Deals Under Review
Reports indicate that the legal team representing the Angel City Football Club has claimed Crypto.com withheld payments and has ultimately backed out of the deal that was initially announced in December 2021. In addition, plans to dissolve the partnership with Twitch Rivals have been put in place, with both parties aiming to conclude their agreement by the end of 2022. There’s also speculation that the FIFA partnership might see a significant reduction in hospitality packages from Crypto.com.
Financial Struggles and Future Plans
Despite these setbacks, the exchange has maintained some of its high-profile marketing campaigns, including a notable $700 million sponsorship deal that resulted in the renaming of Los Angeles’ Staples Center to Crypto.com Arena. The firm continues to push forward with its renovation plans for the arena despite the current market conditions.
Employment Cuts
While CEO Kris Marszalek announced plans to downsize approximately 5% of its employees back in June, insiders indicate that the real percentage of staff cuts was likely much higher, with estimates ranging from 30% to 40% having left between June and August, many as part of layoffs.
Regulatory Approvals Amidst Challenges
On a brighter note, since the summer, Crypto.com has received regulatory approvals from financial authorities in Italy, Cyprus, France, and the United Kingdom to operate its services for local residents.
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