Defunct crypto brokerage company Genesis Global Trading which has taken a lot of hits as a result of the decline in the crypto market has announced the retrenchment of about 30% of its staff and is considering filing for bankruptcy.
According to a report by Wall Street Journal on January 5, the crypto lender’s financial crisis prompted the layoffs which spread across different sections of the company. The crypto lender now has just 145 staff after this round of retrenchment according to people familiar with the matter.
Unfortunately, this is not the first layoff for the New-York based broker in the past six months. In August last year, the company’s CEO resigned and 20% of its 260-person employees were slashed as a result of losses tied to the collapse of Three Arrow Capital.
Additionally, the firm has contracted investment bank Moelis & Co to evaluate its option as its also considering filing for Chapter 11 bankruptcy.
However, the layoffs come a day after Genesis Global appealed to its clients to be patient as it is doing everything possible to solve the liquidity problems faced by the firm. Notwithstanding, the firm’s derivatives and spot trading businesses are still running and meeting the needs of their clients.
Recall that the company in November halted lending withdrawals due to the ongoing FTX situation. The halt came as a result of the “abnormal withdrawal requests” on the platform. Likewise, in an open letter, the CEO and co-founder of Gemini Exchange wrote to Barry Silbert, the CEO of Digital Currency Group (DCG) regarding his inability to access customers’ funds.
The funds of about $900 million were entrusted to Genesis which happens to be a subsidiary of DCG. A creditor committee has been established to help Gemini recover its money from Genesis and its parent company.
Crypto Firms Downsize to Keep up With Market Heat
Inevitably, the ongoing crypto winter and the bearish market position have forced many crypto firms to slash a sizable number of their workforce in order to remain afloat and continue operations.
Publicly traded crypto exchange Coinbase Global Inc, NFT giants Dapper labs, Leading digital assets payment platform Stripe Inc, Cosmos-founded Blockchain company Ignite, and many others have all announced job cuts in response to the crypto market realities.
