As pressure mounts, crypto firm Genesis cuts 30% of its workforce | Crypto News

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Several companies have suffered from declining investor appetite for crypto after the big exchange FTX exploded late last year.

Cryptocurrency firm Genesis has cut 30% of its workforce in a second round of layoffs in less than six months, Reuters reported, citing a person familiar with the matter as pressure mounts on executives. crypto industry to cut costs following a downturn.

As we continue to face unprecedented challenges in the industry, Genesis has made the difficult decision to reduce our workforce globally, 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 in the United States.

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, in collaboration with [parent company] Digital Currency Group and advisors appointed by various customer groups, to assess options to preserve customer assets and move the business forward, the Genesis spokesperson said in an emailed statement.

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 also said it was cutting its workforce by 40%, or about 200 employees, as it tried to contain costs. Its stock tumbled more than 42% as it reported a sharp drop in crypto-related deposits in the fourth quarter on Thursday, as spooked investors withdrew more than $8 billion in deposits.

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 firms’ 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.

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