January 9, 2022: -Genesis Trading, the embattled crypto lending arm of Barry Silbert’s Digital Currency Group, has cut its headcount by 30% as it states increasing pressure from creditors and the threat of bankruptcy, a spokesperson stated.
Genesis is laying off 20% of its workforce and last year replaced its CEO. Silbert’s crypto conglomerate, including the Grayscale Bitcoin Trust (GBTC) and mining firm Foundry, was reached by the market tumult of the previous year and the bankruptcy of the crypto hedge fund Three Arrows Capital.
Regarding 60 positions were eliminated, said the source, who asked not to be named as the numbers are confidential. The recent reduction comes a day following interim CEO Derar Islim told clients that Genesis needed more time to solve its financial crisis. The company now has around 145 employees.
Genesis engaged bankruptcy professionals after the collapse of crypto exchange FTX and its sister hedge fund Alameda Research. The Wall Street Journal stated that Genesis had sought an emergency loan of $1 billion shortly following the implosion of Alameda, which was a major Genesis client. Genesis froze savings for all clients after FTX filed for bankruptcy protection on November 11.
Silbert is coming fire as a result of the saving freeze. Earlier this week, Cameron Winklevoss, a Genesis client and CEO of crypto exchange Gemini, accused Silbert of “bad faith” stalling tactics and demanded a solution to the liquidity crisis at Genesis. He stated that DCG owes $1.675 billion to Gemini customers and different Genesis creditors.
On Twitter, Silbert responded that DCG never borrowed $1.675 billion from Genesis and “is current on all loans outstanding.”
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