Crypto Broker Genesis cuts 30% of its staff and considers bankruptcy

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Topline

Yet another major cryptocurrency player is at serious risk of bankruptcy, as sources told the Wall Street Journal that embattled lender Genesis is considering filing for bankruptcy, while the company said on Thursday it had significantly cut its workforce.

Barry Silbert, CEO of parent company Genesis Digital Currency Group.

2016 Bloomberg Finance LP Key Facts

Genesis has laid off 30% of its employees, a person familiar with the matter told Forbes, matching an earlier report from CoinDesk, which along with Genesis is also owned by former billionaire Barry Silberts Digital Currency Group (Genesis did not immediately responded to Forbes’ request for comment).

Although Genesis has yet to publicly announce that it will file for bankruptcy, its outlook is bleak: The company suspended withdrawals from its lending unit on Nov. 16 and did not disclose a plan to resume withdrawals within seven weeks later.

Genesis owed $1.8 billion to creditors in December, a person familiar with the matter told Forbes at the time.

Key Context

The disclosure comes on the same day as leading crypto bank Silvergate Capitals, which disclosed $8.1 billion in net withdrawals in the last three months of 2022. Genesis had loaned $2.4 billion to crypto hedge fund Three Arrows Capital which went insolvent in June, and Genesis said in November it had $175 million in funds tied up in its FTX accounts but had no outstanding loans to FTX or Alameda Research, the companies founded by the billionaire turned pariah Sam Bankman-Fried.

Surprising fact

Genesis would join a long list of bankrupt former crypto giants: Alameda, BlockFi, Celsius, FTX, Three Arrows and Voyager all filed for insolvency last year.

Tangent

Cameron Winklevoss, the billionaire chairman of crypto exchange Gemini wrote a scathing open letter to Silbert on Wednesday, accusing him of engaging in bad faith stall tactics regarding Geminis’ exceptional $900 million loan to Genesis. , allegations that Silbert later denied.

Forbes Ratings

We estimate that Silbert, worth $3.2 billion last April, is now worth $0, largely due to Genesis’ mountain of debt. The Winklevoss twins are worth $1.1 billion each, according to our estimates, up from $4 billion each in April 2022 as the crypto industry crashed.

Further reading

Crypto Lender Genesis Halts Withdrawals: FTX Collapse Created Unprecedented Market Turmoil (Forbes)

Silvergate stock tumbles nearly 50% as bank grapples with crypto crisis (Forbes)

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