According to a Thursday Wall Street Journal story, bitcoin lender Genesis will eliminate around 30% of its personnel. The firm will be removing employees in a second wave of layoffs in less than six months.
On November 16, the lending division of the cryptocurrency company Genesis Global Capital. It put a hold on customer withdrawals, claiming “unprecedented market dislocation” in the wake of the demise of the big-name exchange FTX.
Genesis has also let its customers know that it would need additional time to find a solution to the problems at its lending division.
“While we are committed to moving as quickly as possible, this is a very complex process that will take some additional time. We believe we can arrive at a solution,” Executive Vice President and Acting CEO Derar Islim stated in a letter. “We will continue to give you updates on meaningful developments, including any updates on timing.”
Genesis disclosed that it has $175 million in exposure to FTX
Near the end of 2022, one of the biggest cryptocurrency exchanges in the world, FTX. It was abruptly shut down, causing a liquidity bottleneck at Genesis. Genesis previously disclosed that it has $175 million in exposure to FTX, forcing its parent company Digital Currency Group to inject $140 million into the company in November.
The cryptocurrency lender has been working to attract more funds for its lending division. But some of the key investors approached have objected to Genesis connections to other linked companies that are a part of Barry Silbert’s Digital Currency Group.
Investors have left riskier assets due to rising interest rates. Moreover, they have concerns about an economic slowdown, and recent bankruptcy filings in the industry have increased the unpredictability. The trend for laying off employees is still in process. However, it has slightly shifted from tech firms to cryptocurrency trading firms.
On August 17, the former CEO, Michael Moro, resigned immediately. The company announced plans to “align our organization to our strategic priorities.” while also reducing personnel by 20%.
Cameron Winklevoss, a co-founder of Gemini, sent an open letter to DCG CEO Barry Silbert earlier on Monday accusing him of “bad faith stall tactics.” He asserts that his firm has attempted in vain to find a way to recover the money.
The crypto moguls, the Winklevoss twins, are putting pressure on DCG, the parent company of a variety of crypto goods, including mining firm Foundry and news outlet Coindesk. Genesis was Gemini’s main loan partner, which explains this. They attempted in vain to find a way to recover the money.
