Crypto lending firm Genesis Global Trading has reduced its workforce by 30% and is considering filing for bankruptcy protection.
Recall that Genesis had laid off 20% of its workers in August 2022 due to its massive exposure to the currently bankrupt hedge fund, Three Arrows Capital (3AC). Around that same time, its then-CEO, Michael Moro, stepped down from his position.
Genesis Cuts Workforce by 30%
Following the latest staff reduction, the crypto brokerage firm now has 145 workers left. Before its first layoff last year, it had a headcount of 260.
“As we continue to navigate unprecedented industry challenges, Genesis has made the difficult decision to reduce our head count globally. These measures are part of our ongoing efforts to move our business forward,” a spokeswoman for Genesis said.
Aside from Genesis, other crypto-related companies are struggling with their finances. Earlier on Thursday, Silvergate, a California-based bank focused on cryptocurrency transactions, laid off over 200 staff, representing 40% of its workforce. The move was taken to cover $8.1 billion worth of users’ funds.
Genesis to File for Bankruptcy Protection
The financial struggles faced by the lending firm now make it consider filing for Chapter 11 bankruptcy protection.
Genesis is currently collaborating with the investment bank, Moelis & Co., to weigh the matter around its finances and consider a “potential chapter 11 filing.” The goal of the crypto firm is to “preserve client assets and move the business forward.”
This is notably not the first time the firm is considering filing for bankruptcy protection. After a failed attempt to raise a minimum of $1 billion in fresh capital for its lending services in November 2022, Genesis hinted to the public that it may consider bankruptcy protection.
Recall that customers’ funds have been locked up in Genesis since mid-November.
Meanwhile, Su Zhu, the co-founder of the bankrupt hedge fund 3AC, published a series of tweets earlier this week, commenting on Genesis’s condition. He stated that Genesis would have been long gone if not for the intervention of its parent company, Digital Currency Group (DCG).
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