Jan 5, 2023 - Economy

Crypto Lender Genesis lays off 30% of staff, report

Barry Silbert, owner of the Digital Currency Group, which owns Genesis Trading. Photo: Joe Buglewicz/Getty Images

Genesis Trading has laid off 30% of its staff as it continues to consider a bankruptcy filing, according to a new report by the Wall Street Journal.

Why it matters: If Genesis goes under, it could mean that the contagion from FTX has not been resolved. Further, as a subsidiary of the Digital Currency Group, there's the looming threat that its fall could also take down a mainstay of the blockchain industry.

Catch up fast: In November, Genesis announced it was suspending withdrawals for depositors who had contributed funds to its lending unit, blaming the decision on repercussions from the FTX bankruptcy.

  • Genesis has provided four updates to clients since FTX collapsed, none of which have addressed when withdrawals might be re-opened.
  • The company, via an outside spokesperson at strategic advisor FGS Global, confirmed that deposits remain frozen.

What they're saying: In a Wednesday update to clients, Derar Islim, interim CEO, wrote, "We believe we can arrive at a solution. We will continue to give you updates on meaningful developments, including any updates on timing."

Of note: Also yesterday, a decision in the bankruptcy case of fellow crypto lender Celsius could be making Genesis depositors more anxious.

  • The judge there found that depositor assets belonged to the estate (that is, Celsius), and could be used to fund continued operations.

By the numbers: No specific number of employees has been reported with respect to the Genesis layoff. In Aug. 2022, the WSJ reported that it had let go of 20% from a staff of 260, which would have brought it to around 200 employees.

  • If staffing stayed level since August, a 30% cut now would mean roughly 70 additional people.
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