Genesis Trading, an arm of Barry Silbert’s troubled Digital Currency Group, has slashed its workforce by a staggering 30% as part of efforts to remain afloat.
The conglomerate has faced a ton of bad business decisions and is on the brink of bankruptcy following mounting pressure from its creditors. A report from Wall Street Journal (WSJ) suggests the layoffs could be as high as 60 individuals, with insiders with knowledge of the matter noting the terminations cut across several departments.
“As we continue to navigate unprecedented industry challenges, Genesis has made the difficult decision to reduce our headcount globally,” a company spokesperson said. “We sincerely appreciate the hard work of our talented and dedicated team as we continue to work to identify the best outcome for Genesis’s business, clients and employees for the long-term.”
The news of tapering its workforce is coming on the heels of an announcement by the firm’s interim CEO, Derar Islim, that Genesis was seeking a time extension to solve its financial crisis. With the total employee count at Genesis pegged at 145, operating a leaner budget over the next few months is one of Islim’s strategies to find a solution for the liquidity issues.
In 2022, Genesis had already reduced its workforce by 20%, and at that time, the company stated that it “was not immune to the market drop and the damage to overall sentiment” in the virtual currency industry. It was revealed that the company had massive exposure to Three Arrows Capital (3AC) while its parent company DCG received its fair share of losses.
Things got from bad to worse for Genesis following FTX’s collapse in November, with swirling reports that the company sought a hasty loan of $1 billion. On November 16, Genesis froze withdrawals for customers, confirming that “it will take additional weeks rather than days for us to arrive at a path forward.”
A bland start to the new year for digital asset firms
2023 appears to have begun on the wrong foot for virtual currency service providers following multiple reports of layoffs. Huobi Global confirmed that it will be laying off 20% of its staff in the coming weeks after denying the claims for over a week.
An insider disclosed that the embattled exchange halted the payment of bonuses and welfare subsidies for employees. Furthermore, an internal memo to staff revealed that the exchange has abandoned paying salaries in fiat and will be making payments in stablecoins, urging all employees to create an account with the exchange.
The unsavory start to the new year has been described as a spillover from 2022, a year rocked by sudden implosions of industry behemoths. Several virtual currency companies bit the bullet by announcing double percentage layoffs in the tumultuous year, like Coinbase (NASDAQ: COIN), Gemini and Crypto.com
Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple,
Ethereum, FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.