Crypto lender Genesis lays off 30% of its staff

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Crypto lender Genesis is cutting 30% of its staff in a new round of layoffs, the company announced on Thursday.

First reported by the Wall Street Journal, this latest round of job cuts comes two months after it froze customer withdrawals.

Genesis is a crypto financial services company with trading, lending, market making and custody activities that is owned by Digital Currency Group (DCG).

DCG also owns Grayscale, sponsor of the world’s largest bitcoin trust, GBTC, as well as crypto media, Coindesk, and crypto mining financier, Foundry.

Genesis has achieved several major successes during the crypto market turmoil of 2022.

The company suffered a $2.4 billion loss after its main borrowing partner, Three Arrows Capital, failed to meet margin calls on its loans from June 16; Three Arrows officially filed for bankruptcy on July 2. In August, the company also announced the resignation of its CEO and layoffs of 20% of its workforce. More recently, Genesis eliminated customer loan withdrawals in November.

The company was also known to be a major lender to Alameda Research, the trading arm of bankrupt crypto platform FTX.

Since Genesis suspended withdrawals, Barry Silbert, CEO of its parent company DCG, said he was seeking between $500 million and $1 billion in funding for the company.

Earlier this week, Cameron Winklevoss, co-founder and CEO of crypto exchange Gemini, shared an open letter to Silbert, accusing DCG of owing Genesis customers $1.6 billion and calling the business relationship between DCG and Genesis beyond the mix.

Winklevoss also accused Silbert of bad faith stall tactics as the companies’ trade dispute came to a head.

Tyler Winklevoss and Cameron Winklevoss (L-R) creators of crypto exchange Gemini Trust Co. on stage at Bitcoin Convention 2021, a cryptocurrency conference held at the Mana Convention Center at Wynwood on June 04, 2021 in Miami, Florida . (Photo by Joe Raedle/Getty Images)

Through its Earn program, Gemini customers owe Genesis $900 million in deposits, Winklevoss said. Gemini also organized a creditors’ committee and hired restructuring lawyers and financial advisers, Kirkland & Ellis and Houlihan Lokey.

Silbert denied the charges, stating that Genesis’ next loan payment is not until May 2023 and that DCG delivered a proposal to Genesis and Geminis advisers on December 29.

The story continues

On Wednesday, Derar Islam, interim CEO of Genesis, told clients the company had cut costs, had its cash and derivatives trading businesses fully operational, but said it needed more time to weigh his options.

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