EXCLUSIVE: Major Maltese Blockchain Company Fires Most Of Its Staff After Running Into Problems
Cryptocurrency market dip forces major Maltese blockchain company to let go of most of its workforce
DQR's CEO collects the best career programme award at the Malta Blockchain Summit. Photo: Malta Blockchain Summit
One of Malta’s most prominent blockchain companies has been forced to let go of most of its staff after running into financial difficulties, Lovin Malta can confirm.
In April 2018, the DQR Group confirmed it is relocating from Germany to Malta and that it plans to employ up to 200 people. Back then, parliamentary secretary for the digital economy Silvio Schembri hailed it as one of the largest blockchain companies in the world and said its presence in Malta “will cement Malta’s reputation as the Blockchain Island”.
However, less than a year later, DQR has been forced to fire most of its 65 staff and freeze its operations in Malta after one of its main investors, the German Bitcoin mining company Genesis Mining, ran into difficulties as a result of the recent dramatic dip in the cryptocurrency markets.
"We won’t walk away from Malta as quitting isn’t part of the blockchain philosophy"Kristian Haehndal
“We had to freeze our operation and make our staff redundant while we systematically pay off our debt and bring in new investors,” DQR chief executive officer Kristian Haehndal told Lovin Malta. “Many blockchain companies are struggling with the cryptocurrency market, but this is a natural cycle that people who are experienced in the industry are used to. Speculation will drive the prices up and down, but the overall trend is upwards because cryptocurrencies serve a purpose to people.”
“We didn’t expect [the market dip] to affect our partner so rapidly, but we won’t walk away from Malta as quitting isn’t part of the blockchain philosophy. We are in the process of bringing in new investors and we are very, very close to restarting our operations.”
DQR’s downfall will serve as a reminder of the real-world impact of the volatility of the cryptocurrency markets and will undoubtedly send warning signs to the nascent blockchain industry.
The company had won the career programme of the year award at the Malta Blockchain Summit last year, with the organisers hailing them as “way above the clutter out there”. Meanwhile, Haehndal presented himself as an advocate for the use of cryptocurrencies to financially emancipate people in poverty and indeed had plans to channel some of DQR’s profits into charitable projects.
He immediately flexed his muscles in the Maltese tech industry, buying out fantasy football gaming company Oulala and bringing its co-founders Valery Vollier and Benjamin Carlotti on board, and hiring Tipico’s human resources director Kevin Norville.
A former DQR employee told Lovin Malta that the blockchain company went to lengths to replicate the ‘Silicon Valley experience’ in Malta, furnishing its Sliema office with expensive furniture and technological equipment, allowing its staff to access snack vending machines for free, and treating them all to lavish parties at Club Level 22, one of the island’s most high-end nightclubs.
Haehndal even employed an Australian yogi as a spiritual leader, with the ex-employee stating the plan was for him to be placed in charge of the company’s charitable arm.
Parliamentary secretary Silvio Schembri with Kristian Haehndal at DQR's launch. Photo: One News
However, cryptocurrencies had a torrid year, with Bitcoin slipping from a stunning high of $20,000 in December 2017 to $3,534 as of the time of writing. Although DQR said it plans to provide global crypto exchange platforms, products and advisory services for retail and business clients, the ex employee said it hadn’t developed a tangible product while he was working there and that staff often used to waste time “scrolling through Facebook, shopping online and having long lunches”.
Haehndal adopted a coy stance when asked by Lovin Malta about his company’s products, stating they offer “a range of different products” but doesn’t talk to people about them.
Silvio Schembri briefly referred to the cryptocurrency dip earlier this month, stating Malta’s recent legislation to regulate the industry will help give peace of mind to cryptocurrency investors.