2TM, the parent company of Brazilian cryptocurrency exchange Mercado Bitcoin, is laying off about 15% of its staff, nearly 100 employees, following cuts in June.
CoinDesk first reported the news on Sept. 1.
It's the latest round of layoffs among Latin America-based crypto companies in recent months. Mexico's Bitso, a crypto exchange, announced it would cut 80 employees in May, and Argentine exchange Buenbit told The Block the same month that it had reduced its staff from 215 to 115 employees.
The job losses come amid a collapse in crypto asset prices, including the Terra/Luna crash earlier this year, as well as a general economic slowdown worldwide with inflation steadily expanding.
2TM also faulted a lack of regulation in Brazil that is putting local crypto companies at a disadvantage.
"At 2TM, we unified our brands and concluded the integration of companies acquired in 2021, seeking efficiency and synergy," 2TM said in a statement shared with The Block. "Even so, adversity in the economy continues, and the competitive environment continues deteriorated and unfair without the approval of the legal framework for crypto assets, with players that follow the laws penalized against companies that ignore local rules."
Brazil's Congress was expected to have already passed a long-awaited crypto regulation after the Senate approved it in April, but the bill has been delayed as it awaits approval in the lower house. It is unlikely to become law ahead of the country's presidential elections in October.
In July, Congressman Expedito Netto rejected two provisions in the Senate version of the bill: One was related to asset segregation, and the other would require foreign companies to register as legal entities in Brazil, financial newspaper Valor Econômico reported in July.
Crypto companies have taken varying views on whether those provisions should be included, and how.
Binance, which has taken steps to acquire a local Brazilian brokerage authorized by the country's securities regulator, told The Block in July that it supports regulation in Brazil and elsewhere. However, it believes smaller companies would be negatively impacted by having to comply with new regulations without an adjustment period. It also took the view that the Senate bill did not do enough to explain how the asset-segregation rules would apply to different institutions, therefore creating uncertainty.
In July, Mercado Bitcoin CEO Reinaldo Rabelo told The Block crypto regulation in Brazil is "a fundamental and urgent step."
"Standardization, when done well, goes far from being a restriction and guarantees freedom with responsibility," he said. "It brings legal certainty that stimulates innovation, investments and entrepreneurship, strengthening the country's position in the new digital economy."
2TM raised $50 million in a second closing for its Series B funding round in November, which followed a $200 million closing from the SoftBank Latin America Fund in July. The company announced in January that it was expanding into Europe with Lisbon-based exchange CriptoLoja.
Mercado Bitcoin's Rabelo told The Block that the exchange reported its highest-ever volume in 2021, with transactions totaling more than 40 billion Brazilian reais (about $7.74 billion at today's exchange rate).
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