Cryptocurrency Lender Genesis Cuts Staff, Considers Bankruptcy: The Wall Street Journal

According to a January 5 Wall Street Journal report citing “people familiar with the matter,” Genesis is considering filing for bankruptcy and has shed about 30% of its employees.

The layoffs took place in several departments, leaving the company with 145 employees. Genesis has engaged investment bank and financial advisory firm Moelis & Co. To assess its options for the future, one of which is the possibility of filing for Chapter 11, the report added.

A company spokesperson told the store:

“As we continue to navigate unprecedented industry challenges, Genesis has made the difficult decision to reduce our workforce globally. These actions are part of our ongoing efforts to move our business forward.”

Deepening the scourge of Genesis

The cryptocurrency broker was in the spotlight this week after Gemini co-founder Cameron Winklevoss stalked its CEO, Barry Silbert. Gemini lent Genesis money, and he wants it back.

The Winklevii-led exchange halted withdrawals in mid-November after the FTX crash because it had too much exposure to the now-defunct crypto giant and its investment arm Alameda. It also lent $2.4 billion to the now bankrupt Three Arrows Capital (3AC) hedge fund.

Genesis also paused lending and redemption at the same time. As a result, Gemini had $900 million in customer funds locked up with its revenue partner Genesis.

In November, Genesis sought to raise $1 billion to fund the bailout, threatening bankruptcy if it failed to do so. This hypothesis is now much closer to reality.

Acting CEO Dirar Islam said the company “needs more time to resolve the emerging financial crisis in the field of lending, and has made progress in reducing costs in its areas of business.”

In addition, Genesis’ parent company, Digital Currency Group (DCG), was also affected, as was Grayscale, which also falls under its umbrella. DCG owns a significant stake in Grayscale’s Bitcoin Trust (GBTC), which may need to be liquidated.

Crypto Market Outlook

The markets spent another day on the couch, with a total capitalization of about $853 billion. The bankruptcy of Genesis and the liquidation of DCG’s GBTC holdings are likely to lead to the collapse of the cryptocurrency at another stage.

The absolute bottom of the cycle may not have been reached yet, but the consolidation is continuing for the time being.

Crypto Lender Genesis Post Cuts Employees, Mulls Bankrupt: WSJ Appears First on CryptoPotato.

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