Crypto lender Genesis lays off 30% of staff
Crypto lender Genesis is cutting 30% of its staff in another round of layoffs, the company said Thursday.
First reported by the Wall Street Journal, this latest round of job cuts comes two months after it froze customer withdrawals.
Genesis is a crypto financial services company with trading, lending, market making, and custody businesses that is owned by Digital Currency Group (DCG).
DCG also owns Grayscale, sponsor of the world's largest bitcoin trust, GBTC, as well as crypto media outlet, Coindesk, and crypto mining financier, Foundry.
Genesis took several major hits during 2022's crypto market turmoil.
The company took a $2.4 billion loss after major borrowing partner Three Arrows Capital failed to meet margin calls on its loans starting on June 16; Three Arrows officially filed for bankruptcy on July 2. In August, the company also announced the resignation of its CEO and 20% workforce layoffs. Most recently, Genesis eliminated customer loan withdrawals in November.
The company was also known to be a significant lender for Alameda Research, the trading arm of bankrupt crypto platform FTX.
Since Genesis paused withdrawals, Barry Silbert, CEO of its parent company DCG, has said it’s seeking anywhere between $500 million and $1 billion in funding for the company.
Earlier this week, Cameron Winklevoss, co-founder and CEO of the crypto exchange Gemini, shared an “open letter” to Silbert, accusing DCG of owing Genesis customers $1.6 billion and calling the business relationship between DCG and Genesis “beyond commingled.”
Winklevoss also accused Silbert of “bad faith stall tactics” as the companies’ business dispute came to a head.
Through its Earn program, Gemini customers are owed $900 million in deposits by Genesis, Winklevoss said. Gemini has also organized a creditor committee and hired restructuring lawyers and financial advisors, Kirkland & Ellis and Houlihan Lokey.
Silbert denied the accusations, stating that Genesis’ next loan payment is not until May 2023 and that DCG had delivered a proposal to Genesis and Gemini’s advisors on Dec. 29.
On Wednesday, Derar Islam, Genesis’ interim CEO, told clients the company had made cost reductions, its spot and derivatives trading businesses were fully operation, but said it needed more time to evaluate its options.
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