Neil Dundon

FTX collapse could see crypto sector layoffs accelerate

While the full impact of FTX’s collapse is still unfolding, some have already warned of an increase in layoffs to come “in the months to follow.”

The fall of crypto exchange FTX and potential resulting contagion could lead to an acceleration of crypto-company layoffs in the coming months, recruitment specialists warn.

A Nov. 14 report from crypto data aggregator platform CoinGecko found that as of Nov. 13, the crypto space has seen 4,695 employees let go in 2022 so far, presenting 4% of staff cuts across all “technology startups.”

However, the authors of the report warn that crypto layoffs could increase in the coming months when the “full impact” of FTX’s sudden collapse takes effect:

“With the collapse of FTX since November 2 and its full impact on the cryptocurrency space still unfolding, further cryptocurrency layoffs may occur in the months to follow.”

Speaking to Cointelegraph, CryptoRecruit founder Neil Dundon argues that while FTX’s events will cause some layoffs, it hasn’t changed the broader trend that crypto recruitment follows crypto prices.

“Layoffs have been consistent effectively following the same trend as crypto prices. FTX hasn’t changed that broader trend albeit a tragic event,” he said, adding:

“There will be layoffs because of it but that will present opportunities for good projects to scoop up good talent which we are collecting.”

Kevin Gibson, the founder of recruitment firm Proof of Search, was less optimistic, sharing that he had one candidate that was due to start employment today but had his offer “pulled” during the first call with the company.

Gibson said it was hard to comment on how the FTX collapse will shake out as it’s “changing daily” but said his candidate’s experience “will not be an isolated incident.”

Companies across the crypto sector have already undergone a number of layoffs throughout the year as a result of the market downturn.

Among the most recent staff cuts in the industry include payment processor Stripe’s layoff of 1,000 employees, Flow blockchain developer Dapper Lab’s 22% cut and venture capital firm Digital Currency Group’s 10% layoff. All layoffs took effect in early November.

Digital asset-focused investment firm Galaxy Digital was also reported to be eyeing a 20% cut on Nov. 1.

Coinbase is understood to have cut another 60 staff on Nov. 10, according to Yahoo Finance.

The latest CoinGecko report follows an earlier Nov. 4 report, which looked into the cities most impacted by cryptocurrency layoffs.

At the top of the list was San Francisco — home to Silicon Valley, one of the world’s largest technology and innovation hubs — which was followed by Dubai, New York City and Singapore.

Crypto security experts raking in $430K salaries amid spike in hacks

The demand for blockchain security experts comes amid a rise in crypto hackings in 2022.

The rise of crypto hacks over 2022 has skyrocketed demand for blockchain security experts, with some auditors making upwards of $430,000 per year.

Speaking with Cointelegraph, blockchain recruitment firm CryptoRecruit founder Neil Dundon said that while security audit services have long been in demand, the rise of decentralized finance (DeFi) protocols has opened up opportunities for auditors to review potentially vulnerable smart contracts:

“There’s always been a demand for security auditors […] But since DeFi apps have been out there, there has been quite a big increase in demand for security audits across the space because one small vulnerability in the protocol can potentially lead to the loss of hundreds of millions of dollars.”

A report from Chainalysis earlier this month revealed that hackers extracted more than $2 billion from cross-chain bridge protocols alone this year.

In a Bloomberg report on Monday, CEO of decentralized lending service Morpho Labs Paul Frambot said that crypto security audits have moved from a “nice to have” business expense to a “must have” one.

“Security is, in my opinion, not taken sufficiently seriously in DeFi,” he said.

The rise in demand for crypto security auditors has seen a plethora of “for hire” ads across the industry.

According to job advertisements posted on Cryptocurrency Jobs, blockchain audit companies mostly look for experienced programmers with an understanding of blockchain technology, cybersecurity and cryptography.

While most security audit salaries fall within the $100,000-$250,000 range, some companies are willing to pay upward of $430,000 per year, according to Web3.career’s job board.

Crypto recruitment firm Plexus Resource Solutions Zeth Couceiro made a similar comment to Bloomberg, noting that in some cases, blockchain security auditors have been raking up to $400,000 annually.

Couceiro added that these auditors tend to make about 20% more than Solidity-focused developers, which is the most popular programming language used to deploy smart contracts on Ethereum and other Ethereum Virtual Machine- (EVM)-compatible blockchains.

Among the top vulnerabilities that security auditors look for in smart contracts include timestamp dependency, reentrancy attacks, random number vulnerability and spelling mistakes.

The Bloomberg report noted that venture capital firms have already poured $257 million into crypto security audit companies this year, which is up 38.9% from all of 2021, according to CB insights.