Affirm Shutting Down Its Crypto Business

| Updated
by Sanaa Sharma · 3 min read
Affirm Shutting Down Its Crypto Business
Photo: Hubert Burda Media / Flickr

The firm’s chief financial officer Michael Linford explained that the decision was taken to reach the profitability figures in the future.

The Chief Executive Officer of Affirm Max Levchin has verified the news that the company will be closing its “Affirm Crypto Program”. This comes after diminished customer spending and an evolving macroeconomic ecosystem.

The CEO of the buy-now-pay-later company revealed a letter to the stockholders on February 8th, along with a nineteen percent employee cut. He explained that the unprecedented macroeconomic scenario along with the need to compensate for a few liabilities on the firm’s balance sheet were the two most significant reasons for the undertaking.

According to the statement, the company was doubling down on core businesses while slowing the pace of projects with less certain revenue timelines. Hence, the company decided to not only reduce the employee number in the corporation but also sunset a few initiatives, one of which is the Affirm Crypto.

The firm’s chief financial officer Michael Linford explained that the decision was taken to reach the profitability figures in the future. Linford explained that the measures were taken to lower the expenditure. The company realized that the cost base was approximately scaled to reach the profitability estimates while still promoting the product roadmap and vision for growth.

Affirm is a millennial-facing payments service provider akin to Afterpay, that enables clients to buy a product online and pay later. The company inaugurated the “Affirm Crypto Program” late in 2021 near crypto’s market peak when it collaborated with Bitcoin payments platform NYDIG to pass Bitcoin transactions and offer a crypto account for Affirm users.

The program was instrumental in allowing users to come up with a plan where monthly interest gathered from a customer’s savings account would by default change into BTC. The cryptocurrency program is all set to close on March 31st. According to Affirm website, the capacity to buy bitcoin through the Affirm app will close on March 2nd.

The note added that any bitcoin in the customer’s account will be traded at CME CF Bitcoin Reference Rate (BRR), and the sale transactions will be deposited into the Affirm Savings account.

The clampdown is a consequence of a more prevalent trend in the crypto space to reduce the workforce. Levchin claimed that nineteen percent of the staff has been asked to leave hereon.

In a February 8th note, Levchin took the onus of the depression in the company’s profits by claiming that he responded at a relatively slower pace to the measures taken by the US Federal Reserve. About twenty-five hundred people are employed at Affirm. The employee cut means that more than five hundred people will lose their jobs today.

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