Genesis Lays off 30% Workforce, Mulls Bankruptcy
Market News

Genesis Lays off 30% Workforce, Mulls Bankruptcy

Story Highlights

Crypto brokerage firm Genesis Global Trading Inc. has laid off 30% of its staff and is exploring several financial options, including filing for bankruptcy.

Crypto brokerage firm Genesis Global Trading has laid off 30% of its workforce and is working with investment bank Moelis & Co. to evaluate strategic options, including potential bankruptcy, the Wall Street Journal reported. Following the job cuts, the company now has 145 employees.  

Crisis Deepens at Genesis

Genesis is a unit of Barry Silbert’s crypto conglomerate Digital Currency Group. This is the second round of layoffs for Genesis, following a 20% workforce reduction in August 2022, when it was significantly impacted by its exposure to the now-bankrupt crypto hedge fund Three Arrows Capital. Genesis’ CEO Michael Moro also stepped down due to this turmoil.

Matters worsened for the brokerage firm due to the collapse of Sam Bankman-Fried’s FTX crypto exchange last year. Genesis had reportedly lent huge amounts to FTX’s sister trading firm Alameda Research prior to its downfall. Genesis disclosed that its derivatives unit had nearly $175 million in locked funds in an FTX trading account. However, the firm stated that it had no ongoing relationship with FTX or Alameda.

In November 2022, Genesis suspended redemptions and new loan originations at its lending arm as it faced abnormal withdrawal requests due to the panic caused by the FTX collapse. This move impacted crypto exchange Gemini as Genesis owes $900 million to Gemini’s clients. Recently, Gemini co-founder Cameron Winklevoss slammed DCG founder and CEO Barry Silbert and accused him of “bad faith stall tactics.”

On Wednesday, Genesis Global Trading’s interim CEO Derar Islim stated that the company needs more time to resolve the financial crisis in its lending business.

Soaring interest rates in 2022 impacted investors’ appetite for risky assets and led to a steep fall in cryptocurrencies and crypto stocks. Multiple bankruptcies and FTX’s collapse have shaken investors’ faith in the crypto market. The numerous risks associated with the crypto market have reinforced the need for regulation. Bitcoin (BTC-USD), the largest cryptocurrency, has crashed over 61% over the past year.



Price Change
S&P 500
Dow Jones
Nasdaq 100

Popular Articles