Crypto lender Genesis cuts workforce by 30%
In a second round of layoffs in less than six months, cryptocurrency lender Genesis will cut around 30% of its workforce, the Wall Street Journal reported on Thursday.
The cryptocurrency firm’s lending arm, Genesis Global Capital, froze customer withdrawals on 16 November, citing “unprecedented market dislocation” following the collapse of major crypto exchange FTX.
Genesis has also informed its clients that it needs more time to come up with a solution for the troubles at its lending unit.
“While we are committed to moving as quickly as possible, this is a very complex process that will take some additional time. We believe we can arrive at a solution,” interim Chief Executive Officer Derar Islim wrote in a letter. “We will continue to give you updates on meaningful developments, including any updates on timing.”
The sudden collapse of FTX, one of the world’s largest crypto exchanges, toward the end of 2022 roiled the digital-asset market and triggered a liquidity crunch at Genesis.
Genesis previously said it had $175 million in exposure to FTX, which forced its parent Digital Currency Group to provide the firm with a $140 million capital infusion in November.
The crypto lender has been trying to raise fresh cash for its lending unit, though some investors approached for the lifeline have balked at the interconnectedness between Genesis and other related entities that are part of Barry Silbert’s Digital Currency Group, Bloomberg News had reported earlier.
Higher interest rates and worries of an economic downturn have roiled cryptocurrencies as investors fled risky assets, with recent bankruptcies in the space adding to the uncertainty.
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