The crypto lending platform Genesis is considering filing for bankruptcy and has laid off around 30% of its staff.
Genesis On The Verge Of Bankruptcy?
Less than six months after its first round of layoffs, Genesis, has been forced to cut loose around 30% of its workforce. Moreover, the word around the blockchain is that the lending platform is considering filing for bankruptcy.
A spokesperson for Genesis has confirmed the news, saying,
“As we continue to navigate unprecedented industry challenges, Genesis has made the difficult decision to reduce our headcount globally.”
According to other sources, the company is working with investment bank Moelis & Co to evaluate its options.
FTX Contagion Spreads
The biggest blow to the industry this year was the utter destruction of the FTX ecosystem. Not only did the major crypto exchange crash down dramatically, but it also took with it several significant institutions and crypto firms. For example, crypto-focused bank Silvergate Capital was also affected heavily by the FTX crash and has announced that it will slash its headcount by 40%.
After the year crypto has had, Genesis would not be the first crypto firm to go down the bankruptcy route. Crypto lender BlockFi was the first to follow FTX into Chapter 11 bankruptcy filing. The market downturn has forced the hands of many crypto executives to cut costs in their respective firms by trimming the workforce fat. In many cases, declaring bankruptcy is the only option left.
Genesis In Trouble
Genesis has been treading troubled waters lately, thanks to its association with the FTX ecosystem. The company’s interim CEO, Derar Islim, penned a client letter in which he wrote,
“We believe we can arrive at a solution. As a key element in this process, we have made significant progress in refining our business plans for Genesis’ client offerings. This includes reducing costs and driving efficiencies in all our business lines.’
In November 2022, the company closed down withdrawals. Just a week before this, it was seeking a billion-dollar emergency loan. Both these events have led to the most recent skirmish with one of the founders of the Gemini crypto exchange, Cameron Winklevoss. The latter has accused Genesis and the Digital Currency Group (DCG) of acting in bad faith. Winklevoss penned an open letter to DCG CEO Barry Silbert, claiming that the latter has been evading all attempts at consensual resolution since Genesis owes members of Gemini Earn around $900 million.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.