Crypto lender Genesis cuts 30% of staff
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Genesis faced financial turmoil when crypto hedge fund Three Arrows Capital and trading firm Alameda Research went bust.Screenshot: Gizmodo
Genesis Global Trading Inc. has felt the heat of the crypto crash that has plagued the industry for the past few months. The company announced today that it is laying off 30% of its workforce, first reported by the Wall Street Journal.
This round of layoffs is the second since August, when the company first reported a layoff 20% of staff in a first cut while CEO Michael Moro resigned. Genesis has faced ongoing financial turmoil due to loans it made to cryptocurrency hedge fund Three Arrows Capital and trading firm Alameda Research.
Three arrows was forced to liquidate last summer This led to Genesis’ first round of layoffs, and this, combined with FTX’s Sam Bankman-Fried using client funds for Alameda Research, likely led to Genesis’ second round of cuts. Genesis now has 160 employees, up from 245 before the initial layoffs. according to Reuters.
“As we continue to navigate unprecedented challenges in the industry, Genesis has made the difficult decision to reduce our headcount globally. These actions are part of our ongoing efforts to move our business forward,” a Genesis spokeswoman told The Wall Street Journal.
Genesis was also involved in a recent legal battle between crypto investors and platform Gemini, founded by Tyler and Cameron Winkelvoss. Gemini promoted high-yielding savings accounts — in some cases yielding over 8%. Gemini generated these high returns by allowing Genesis to lend Gemini client funds institutional borrowers. The lawsuit alleges that Gemini was unable to return funds to its customers due to financial hardship resulting from the now infamous collapse of FTX.
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Genesis is far from the only cryptocurrency company facing job cuts and an uncertain future as the crypto winter drags on. Coinbase, which recently reached a $100 million settlement with the New York Treasury Department, announced it was laying off 1,100 employees, or 18% of its workforce, last June.