Genesis Billionaire-Backed Crypto Lender Axes 30% Of Jobs Months After Laying Off 20% Of Staff

As the crypto lending industry faces increasing financial pressure, Genesis Trading, a subsidiary of Digital Currency Group (DCG), announced a 30% reduction in its workforce, as reported by CNBC. 

The move followed the layoff of 20% of Genesis staff last year and the replacement of its CEO. The total number of job cuts now stands at 145.

What Happened: The decision came after Genesis hired bankruptcy professionals following the collapse of FTX and Alameda Research, a major client of the company. In response to the crisis, Genesis froze redemptions for all clients and was said to have sought an emergency loan of $1 billion.

See Also: Crypto Entrepreneur Cameron Winklevoss Calls Out Barry Silbert For Alleged Delay Tactics In Resolving $900M Debt Dispute

These events have attracted criticism from Cameron Winklevoss, CEO of crypto exchange Gemini, who claimed DCG owed $1.675 billion to his company's customers and accused DCG CEO and founder Barry Silbert of engaging in "bad faith" tactics.

In an attempt to resolve a dispute between their two companies — Gemini Trust Co. and Genesis Global Capital— as it related to the collapse of the crypto exchange FTX, Winklevoss asked Silbert to publicly commit to finding a resolution by Jan. 8, 2023.

See Also: Grayscale Struggles With Dwindling Investor Interest In Ethereum, Bitcoin Trusts

Why It Matters: Silbert denied the allegations but his problems don't stop there. DCG subsidiaries Grayscale Ethereum ETHE and Bitcoin GBTC Trusts had consistently been at a discount since November 2021 and lost significant value due to the decline in Ethererum ETH/USD and Bitcoin BTC/USD.

Grayscale Ethereum Trust had a record discount of 59.39% compared to the price of Ethereum, while Grayscale Bitcoin Trust's shares were trading at a 45.17% discount to the price of Bitcoin.

In an effort to improve liquidity, Grayscale had been seeking approval to convert these cryptocurrency funds into exchange-traded funds (ETFs), which would allow them to be traded on public stock markets.

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Photo: Andrey Popov via Shutterstock