Gemini will cut up to 200 employees, or 25% of its workforce, and wind down operations in the U.K., the European Union and Australia, the crypto exchange disclosed last week in a filing with the Securities and Exchange Commission.
“These foreign markets have proven hard to win in for various reasons and we find ourselves stretched thin with a level of organizational and operational complexity that drives our cost structure up and slows us down,” the company’s founders, Cameron and Tyler Winklevoss, said in a blog post Feb. 5.
The Winklevosses, however, telegraphed a pivot to the prediction market.
“Our thesis is that prediction markets will be as big or bigger than today’s capital markets,” the founders wrote, adding that Gemini Predictions has processed more than $24 million in volume from roughly 10,000 users since it launched in mid-December.
“Predictions will be the machine within our app to see the future. A truth machine,” the Winklevosses wrote. “To have the necessary bandwidth to succeed here, we will narrow our focus.”
Customer accounts in the U.K., EU and Australia will be placed in withdrawal-only mode starting March 5, according to a support notice Gemini sent customers Feb. 5. Creation of new accounts and all incentive programs will be disabled in affected regions. Full closures are set to take effect April 6.
Gemini will continue to operate in the U.S. and Singapore, the exchange said in its SEC filing. The company estimates it will incur about $11 million in pretax restructuring and related charges, mostly in the first quarter. That will include severance payments, employee benefits, facility exit costs, contract termination costs and professional fees, the company said.
Gemini reported a $159.5 million loss in November, citing costs from its September initial public offering and broader marketing efforts.
The crypto firm began trading on the Nasdaq exchange Sept. 12 at $37.01 per share and rose to a high of $45.89 that day but has lost roughly 85% of its value since, as crypto’s flagship currency, bitcoin, has suffered its own drop.
Gemini’s market value has fallen from a peak of $3.8 billion to around $800 million, as of this month.
