Crypto lender Genesis lays off 30% of its staff – source

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Jan 5 (Reuters) – Cryptocurrency firm Genesis has cut 30% of its workforce in a second round of layoffs in less than six months, according to a person familiar with the matter, as pressure mounts on top executives. the crypto industry to cut costs in the wake of a downturn.

Several companies have suffered from the decline in investor appetite for crypto after the explosion of the major exchange FTX in September. Earlier Thursday, crypto-focused bank Silvergate Capital Corp (SI.N) also said it was cutting its workforce by 40%.

“As we continue to face unprecedented challenges in the industry, Genesis has made the difficult decision to reduce our global workforce,” a company spokesperson confirmed.

The layoffs were first reported by The Wall Street Journal, which also said Genesis was considering filing for Chapter 11 bankruptcy.

The company is working with investment bank Moelis & Co to assess its options, the report said, citing people familiar with the matter.

“We continue to work with our advisors, together with (parent company) Digital Currency Group and advisors appointed by various client groups, to assess options to preserve client assets and move the business forward,” the Genesis spokesperson said in an emailed statement.

New York-based Genesis also laid off 20% of its employees in August. The company now has 145 employees, the source said, up from 260 before the two rounds of layoffs.

The crypto firm’s lending arm, Genesis Global Capital, froze client withdrawals in November, citing “unprecedented market dislocation” following the collapse of major crypto exchange FTX.

In a letter to customers on Wednesday, Genesis said it was looking for a solution to the crisis in its lending business but would need more time.

Rising interest rates and fears of an economic slowdown have also put pressure on the crypto industry as investors flee risky assets.

Reporting by Niket Nishant, Manya Saini and Anirban Chakroborti in Bengaluru; Editing by Shailesh Kuber

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