Max Levchin, CEO of buy-now-pay-later firm Affirm, confirmed that they would shut down the “verified crypto program” amid weak consumer spending and the changing macroeconomic environment.
The CEO issued a letter to shareholders on February 8 along with a 19% headcount cut. He cited uncertain macroeconomic conditions and the need to offset some liabilities on the company’s balance sheet as the main reasons behind the decision:
“In a period of heightened economic uncertainty, we are doubling down on our core business, delaying projects with lower revenue schedules, and aligning operating expenses with revenue. In conjunction with reducing our workforce, we are shutting down several initiatives, such as Affirm Crypto.”
The company’s chief financial officer, Michael Linford, said the decision was made to meet a profitability target.
We have taken decisive measures to reduce expenses. We believe our cost base is now adequately sized to meet profitability targets while continuing to support our product roadmap and long-term growth ambitions.
Affirm is a payments service provider facing millennials similar to Afterpay that allows customers to buy a product online and pay later.
The company launched the “Affirm Crypto Program” in late 2021, near the peak of the cryptocurrency market, partnering with Bitcoin payments platform NYDIG to process Bitcoin (BTC) transactions and providing a crypto account to Affirm users.
The software enabled users to set up a scheme in which the monthly interest accrued from the user’s savings account would be automatically converted into BTC.
However, Affirm indicated that its cryptocurrency program will officially shut down on March 31, according to the Affirm website:
On March 2, 2023, the ability to buy bitcoin through the Affirm app will end. We will be shutting down the Affirm Cryptocurrency program on March 31, 2023.
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Any bitcoins in your account will be sold upon program termination at the CME CF Bitcoin Reference Rate (BRR) as of 4:00pm London time. The proceeds of the sale will be deposited into your confirmed savings account, the note added.
From March 2, verified users will no longer be able to buy bitcoin. Source: Affirm
The closure, of course, is part of a larger staff cleanup of the San Francisco lending platform. Levchin said the 19% cut in her workforce took effect on February 8.