Bitcoin firm Ignite lays off 60 employees
The cuts have followed a cryptocurrency market slump and the return of Ignite's former CEO, who was widely criticized during his leadership of the firm.
The company that helped found the Cosmos blockchain ecosystem, Ignite, has seen more than half its staff leave this week, two ex-employees and a source close to the company told CoinDesk.
After Ignite CEO Peng Zhong announced on Friday that he would be leaving the company, news of other top executives' departures also surfaced. The re-org was contentious, so the high-profile exits at Ignite raise questions about the firm's future.
Ignite laid off some employees, and others volunteered to leave the company in return for severance packages. The firm joins other crypto companies hit hard by the sector’s recent collapse, including BlockFi, Coinbase (COIN) and Crypto.com. But according to CoinDesk’s sources, Ignite’s workforce cuts stemmed not only from recent market conditions but internal factors as well.
CoinDesk was told by two ex-Ignite employees that CEO Jae Kwon had mentioned the possibility of layoffs when he returned to the company in May.
In 2014, Kwon, one of Cosmos's original creators, founded Ignite (now called Tendermint) and its parent company, All In Bits Inc. After a dispute with some of the employees became widely publicized in 2020, Kwon stepped down as Tendermint’s CEO but retained a seat on the board. In May 2019, CoinDesk reported that Kwon would be returning to the company as CEO of New Tendermint: an Ignite spin-off focused on some of his side projects.
CoinDesk's sources say that when Kwon announced his return at a company all-hands in May, he offered severance packages to some employees.
One of the ex-Ignite employees said that it took several weeks after the announcement to learn details about the new relationship between Ignite and New Tendermint.
An ex-employee said that New Tendermint, Kwon’s new venture, was recruiting employees. Those who did not apply were told that they would be invited to join a reformulated version of Ignite or the new project called Cosmos Cash. The ex-employee said that Kwon clarified that not all Ignite employees would make the cut.
The crypto crash in June forced Kwon to reduce the workforce even more than he had originally planned, a person said.
CoinDesk has reached out to Kwon but has not received a response.
CoinDesk has reviewed a spreadsheet listing over 50 ex-Ignite employees from multiple departments who were laid off or voluntarily accepted severance packages. A number of people who have left or are leaving the company could total over 100, and the list was circulated to other Cosmos-based projects, which might be looking for workers.
At the time of these departures, Ignite’s headcount was around 140.
Re-branding, Re-organizing and restructuring are three ways of changing a company
At the beginning of February, Tendermint changed its name to Ignite. CEO Peng Zhong told CoinDesk at that time that the rebranding was meant to signify a change in strategy for the firm, which had previously focused on building backend infrastructure for Cosmos.
dYdX, a leading crypto exchange platform, will soon be switching from Ethereum to its own Cosmos-based blockchain. This move was announced after the dYdX team expressed their confidence in the Cosmos ecosystem's ability to handle high volumes of transactions.
Today, most of Cosmos’ core infrastructure is maintained by a broad community of teams and companies other than Ignite. Zhong said that with the rebrand from Tendermint, Ignite will focus on Emeris - the firm's Cosmos-based crypto investment hub.
Ignite said that the development of Emeris was "Suspended" in a statement released on Friday.
