Crypto.com has announced a €150mln (£131mln) investment to establish Paris as the digital asset exchange’s European hub.
The news is a tad surprising given that the Singapore-based, Matt Damon-fronted digital asset exchange earlier this year called the UK a “strategically important market for us” following successful regulatory approval from the Financial Conduct Authority.
Back then, chief executive officer Kris Marszalek called the approval a “significant milestone for Crypto.com,” while also touting the government’s “agenda to make Britain a global hub for crypto asset technology and investment”.
But that agenda has taken a back seat after the resignation in July of chancellor Rishi Sunak, who was the primary cheerleader behind the UK crypto economy.
A chaotic Truss cabinet sparring with the Bank of England and a spiralling cost-of-living crisis make Britain’s crypto hub plans increasingly irrelevant for the government for now, so it seems that a European headquarters makes more sense for Crypto.com as it seeks to expand its offering across the continent.
Bonjour Paris ????????We’re excited to deepen our commitment and presence in France, by making Paris our new European regional HQ ????
Full details:https://t.co/nBoixpyMHi pic.twitter.com/EhkbKYUOZQ
— Crypto.com (@cryptocom) October 12, 2022
In all fairness, Crypto.com is only a mid-tier crypto exchange, but despite being the 21st-largest per visitor count and only netting around 2% of Binance’s trading volumes, it has a seemingly massive spending budget.
From Super Bowl advertisements featuring A-list celebrities to buying the naming rights to the home arena of the LA Lakers – formerly called the Staples Center – Crypto.com is on a mission to take over.
Crypto.com arena, formerly the Staples Center, renamed after the biggest naming rights deal ever – Source: Shutterstock
It’s just the sort of company a supposed global crypto hub would want to attract, but alas, “we are incredibly excited to cement our commitment to France and Europe through the establishment of our regional headquarters in Paris,” said chief operating officer Eric Anziani.
Crypto entrepreneurs are also choosing the EU over the UK as they flee Japan and other draconian regulatory regimes.
As Proactive said earlier, “if the UK wants to be a competitor in the global crypto economy, it will need to start getting its regulatory house in order,” especially given the harmonisation of EU crypto regulations due to take effect in 2024.
Without some forward-thinking, Crypto.com won’t be the only one to snub London in favour of Paris.
They were just writing checks they could only cash when things were good
All that money being pumped into celebrity endorsements and naming rights hasn’t saved Crypto.com from the crypto winter.
In June, Kris Marszalek announced that the exchange was laying more than 250 employees, approximately 5% of its workforce, as the market continued to plummet.
But according to a recent AdAge report, that figure could actually be more than 2,000.
“They were just writing checks they could only cash when things were good,” one former employee stated in the report.
One advertising executive said: “I’ve worked with many ambitious clients before, but Crypto.com is probably the most ambitious client I’ve ever worked with.”
Crypto.com has since refuted these claims, telling Tech in Asia that “any media reports of ongoing job reductions are inaccurate, as are additional estimates and rumours around the total number of reductions”.
Regardless of the actual number, it seems like Crypto.com’s ambition is heavier than the revenues it is pulling in.
Proactive has extended an offer for comment to Crypto.com.