- Genesis Global reduced its staff by 30% in the latest axing round, affecting 145 employees.
- A recent memo from the lending platform discloses that it is cutting costs as part of its new business plan.
- At the end of the third quarter of 2022, Genesis Capital Global had active loans totaling $2.8 billion.
- The collapse of 3AC and FTX also affected other firms like Voyager Digital and BlockFi.
In less than six months, crypto lending platform Genesis Global has reduced its workforce for the second time. According to a report by the Wall Street Journal, Genesis Global reduced its start by 30% in the latest axing round, accounting for 145 employees.
In a recent memo to users, the lending platform disclosed that its new business plan mandates that there must be a cost reduction. As reported, the layoff became necessitated due to the crypto lender’s exposure to bankrupt Alameda Research.
Genesis Global suffered losses from loans to the sister company of FTX and Three Arrows capital. With the latest development, there are concerns in the crypto community that Genesis Global is on the verge of bankruptcy.
Following the collapse of FTX, Genesis Global halted withdrawals citing “unprecedented market turmoil.” However, at the end of the third quarter of 2022, Genesis Capital Global had more than $2.8 billion in total active loans. The crypto lender seeks to reclaim billions of dollars in loans from the two bankrupt organizations.
After the firm reduced its workforce in August, the CEO, Michael Moro, stepped down to an advisory role. Then, the crypto lender transitioned into a new leadership, with Michael Moro occupying the CEO position from 2016 until his departure last year.
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1/ As part of our goal in providing transparency to the market, I wanted to share the latest update at @GenesisTrading.— Michael Moro (@michaelmoro) July 6, 2022
Other Notable Crypto Organizations Affected by the Crypto Winter
Alongside Genesis Global, Voyager Digital and BlockFi are other firms affected by the collapse of 3AC and FTX. Voyager Digital is under Chapter 11 protection and is negotiating with Binance.US for a takeover deal.
However, in a court filing on Wednesday, the United States Securities and Exchange Commission objected to the takeover deal. The regulator raised concerns about Binance.US’s financial capacity to carry out the deal.
Crypto lender BlockFi filed for voluntary Chapter 11 bankruptcy last November as the FTX contagion spread. FTX’s demise led the firm to cease withdrawals in the same vein as Genesis Global. According to the bankruptcy filings, BlockFi has between $1 billion and $10 billion in assets and liabilities and $257 million in cash.
On the Flipside
- Genesis Global has also been involved in a dispute with Gemini, whose founder Cameron Winklevoss alleged Genesis parent DCG of delaying the return of a frozen $900 million to Gemini’s Earn users.
Why You Should Care
2022 saw a string of layoffs from crypto firms due to turbulent market conditions. With mass layoffs by SilverGate and Gemini Global, the new year appears to follow the same pattern as the last.
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