Update: Genesis sacks 30% of workers, may file for Chapter 11 bankruptcy
On Jan. 4, Genesis CEO Derar Islim wrote that the firm was "reducing costs and driving efficiencies" in all of its businesses.
Beleaguered crypto lender Genesis has sacked 30% of its workers and may file for bankruptcy, The Wall Street Journal reported Jan. 5, citing people familiar with the matter.
Genesis previously laid off 20% of its workforce in August 2022, citing market conditions.
In a Jan. 4 statement, Genesis CEO Derar Islim gave hints about this new development. Islim wrote that Genesis was “reducing costs and driving efficiencies” in all of its businesses.
Islim also said the firm is committed to resolving its financial issues. According to him, the firm is “moving as quickly as possible” and is involved in a “very complex process that will take some additional time.”
The Wall Street Journal report also indicated that Genesis is evaluating a possible chapter 11 bankruptcy filing in cooperation with Moelis & Co. The goal of such a filing would be done with the intention of “preserv[ing] client assets and mov[ing] the business forward,” a spokesperson said.
If Genesis does decide to file for bankruptcy, it will be one of several crypto firms that have done so over the past 12 months. Various lending firms including Celsius and Voyager Digital filed for bankruptcy last summer. Other firms such as FTX and BlockFi filed for bankruptcy in recent months.
In fact, Genesis has been affected directly by FTX’s failure, Genesis suspended withdrawals for its clients shortly after FTX collapsed in November. One of the programs affected by the withdrawal pause was Gemini Earn, which contained $900 million of user funds.
Gemini Earn was offered in conjunction with the Winklevoss brothers’ crypto exchange of the same name. Gemini co-founder Cameron Winklevoss gave DCG’s CEO Barry Silbert a Jan. 8 deadline to resolve the issues.