Crypto brokerage Genesis lays off 30% of its staff

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Crypto brokerage Genesis laid off about 30% of its workforce on Thursday, or about 60 employees.

As we continue to face unprecedented challenges in the industry, Genesis has made the difficult decision to reduce our global workforce, a Genesis spokesperson told The Wall Street Journal and Bloomberg in a statement sent by e-mail. These measures are part of our ongoing efforts to move our business forward.

The company has 145 employees after the cuts, a spokesperson said.

The latest downsizing marks at least Genesis’ second round since August, when the company cut 20% of its positions. The brokerage’s CEO, Michael Moro, resigned at that time.

Between August and October, however, Genesis lost at least five senior executives: Matt Ballensweig, its co-director of sales and commerce; Michael Paleokrassas, its managing director of trading; Reed Werbitt, its head of cash transactions; Joshua Lim, its derivatives manager; and Michael Patchen, its Chief Risk Officer.

The November collapse of crypto exchange FTX triggered a liquidity crisis at Genesis. The brokerage suspended loan originations and buybacks that month. But the move has drawn ire from crypto exchange Gemini, whose clients hold $900 million of the trapped funds.

Genesis has sought a $1 billion emergency loan from investors and has also attempted to raise capital from crypto exchange Binance and private equity firm Apollo Global Management, The Wall reported. StreetJournal.

Acting CEO Derar Islim said Wednesday that Genesis needed more time to resolve issues in its lending unit but had made progress in cutting costs across its business areas.

Genesis is working with investment bank Moelis & Co. to assess its options, including a potential Chapter 11 bankruptcy filing, people familiar with the matter told the Journal. Genesis warned in November that it was considering bankruptcy.

The brokerage isn’t the only crypto-connected firm to announce double-digit staff cuts this week. Seychelles-based crypto exchange Huobi on Friday announced plans to lay off 20% of its staff. Meanwhile, crypto-heavy bank Silvergate Capital announced on Thursday that it would cut 40% of its workforce.

Genesis’ August job cuts followed steep losses on loans it made to sister company FTX Alameda Research and crypto hedge fund Three Arrows Capital, both of which filed for bankruptcy.

Genesis reportedly loaned Three Arrows $2.4 billion with 50% collateral. Moro, however, said the guarantee was closer to 80%, according to The Wall Street Journal.

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