Genesis Reduces Headcount and Discusses Bankruptcy
Genesis Global Trading is reportedly considering filing for bankruptcy.
The cryptocurrency lender has also laid off 30% of its staff across departments, The Wall Street Journal (WSJ) reported Thursday (Jan. 5), citing unnamed sources. The company is working with an investment bank to evaluate its options.
Reached for comment, a Genesis spokesperson told PYMNTS in an email: “As we continue to navigate unprecedented industry challenges, Genesis has made the difficult decision to reduce our headcount globally. These measures are part of our ongoing efforts to move our business forward.”
The report comes a day after Genesis Global Capital Interim CEO Derar Islim said in a letter to clients that the firm needs more time to fix its borrowing and lending intermediation business, that its derivatives and spot trading businesses remain fully operational, that the company continues to refine its business plans and that it has reduced costs and driven efficiencies in all its business lines.
“Genesis remains focused on finding a solution for our borrowing and lending intermediation business and reaching the best outcome for all affected clients,” Islim said in the Wednesday (Jan. 4) letter. “We continue working with our advisors, in collaboration with [Genesis owner Digital Currency Group (DCG)] and advisors appointed by various client groups, to evaluate options to preserve client assets and move the business forward.”
Genesis announced in November that it was pausing withdrawals from its lending arm as a result of “unprecedented market turmoil.” As PYMNTS reported at the time, the company was one of those caught up in the adverse effects of the insolvency of FTX and its affiliates.
In early December, it was reported that Genesis owes $900 million to Gemini — with which it was the main partner in Gemini’s “earn” program — and that co-founders and brothers Tyler and Cameron Winklevoss were trying to recover the money.
With the layoffs, Genesis adds to a long list of tech companies that have made job cuts during this time of rampant inflation and rising interest rates.
For example, Amazon announced Wednesday that it was cutting more than 18,000 jobs and Layoffs.fyi reported that tech companies eliminated more than 153,000 jobs in 2022, compared to 15,000 in 2021 and 80,000 between March and December 2020.
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