Barry Silbert, Founder and CEO, Digital Currency Group
David A. Grogan | CNBC
Genesis Trading, the embattled crypto lending arm of Barry Silbert’s Digital Currency Group, has cut headcount by 30% as it faces increasing pressure from creditors and the looming threat of bankruptcy, according to a person with knowledge of the matter.
Genesis had already laid off 20% of its workforce and last year replaced its CEO. Silbert’s crypto conglomerate, which includes the Grayscale Bitcoin Trust (GBTC) and mining company Foundry, was hit by the market tumult of 2022 and the bankruptcy of crypto hedge fund Three Arrows Capital.
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About 60 positions were eliminated, said the source, who asked not to be named because the numbers are confidential. The company now has around 145 employees. The latest reduction comes a day after interim CEO Derar Islim told clients that Genesis needed more time to solve its financial crisis.
The Wall Street Journal reported earlier on the cuts.
Genesis engaged bankruptcy professionals shortly after the collapse of crypto exchange FTX and its sister hedge fund Alameda Research. The Wall Street Journal reported that Genesis had sought an emergency loan of $1 billion shortly after the implosion of Alameda, which was a major Genesis client. Genesis froze redemptions for all clients after FTX filed for bankruptcy protection on Nov. 11.
Silbert has come under fire as a result of the redemption freeze. Earlier this week, Cameron Winklevoss, a Genesis client and CEO of crypto exchange Gemini, accused Silbert of engaging in “bad faith” stalling tactics and demanded a solution to the liquidity crisis at Genesis. He said DCG owes $1.675 billion to Gemini customers and other Genesis creditors.
Silbert responded on Twitter by saying that DCG never borrowed $1.675 billion from Genesis and “is current on all loans outstanding.”
Correction: An earlier version of this story has an incorrect number for total job cuts. It also mistakenly said Silbert was referring to Gemini instead of Genesis in the last paragraph.
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Source link: https://www.cnbc.com/2023/01/05/crypto-lender-genesis-trading-lays-off-30percent-of-workforce.html