Ailing crypto lender Genesis Trading confirmed reducing its headcount by 30% as part of its strategy to lower costs. The crypto firm is undertaking massive job cuts to minimize costs and improve financial health.
Necessity of Economizing
Explaining the massive cuts, Genesis Trading’s announcement cited the bearish steam in the recent resignations. Genesis update indicated that layoffs are necessary to navigate the crypto industry’s unprecedented challenges. Genesis spokesperson revealed that the measures portray recent efforts to revitalize Genesis business. The Genesis official appreciated the input of talented employees for the sustained input towards improving the business.
The spokesperson observed that job cuts were inevitable as Genesis was battling financial challenges stretching for several months. Genesis suspended withdrawals in November, citing a liquidity crisis from the $175 million exposure to the embattled FTX.
Headcount Reduction
Genesis interim executive Derar Islim admitted on January 4 that the crypto lender was encountering complex challenges that would take longer to resolve.
Islim explained that such a solution involved reducing Genesis headcount by 60. The job cuts will drive efficiency and lower costs in Genesis business lines.
The second phase of job cuts is higher than the 20% reduction of the workforce announced in 2022. Implementing the second job cut leaves Genesis with 145 employees.
Criticism of Silbert’s Redemption Freeze
Today, Genesis is embroiled in counter accusations with Gemini’s Winklevoss to return funds funnelled to its investment via the Earn program. Genesis admitted owing Gemini $900 million, that Winklevoss blames the parent entity DCG for the delayed refund. In response, the Digital Currency Group (DCG) chief executive requested time to resolve the lending unit challenges.
On January 2, Gemini’s Cameron Winklevoss letter to DCG chief executive Barry Silbert alleged delay tactics. Silbert’s nonaction to lift the redemption freeze imposed after the FTX implosion is perceived unnecessary by the investors whose funds are trapped.
The letter alleged that Genesis advanced a $1.7 billion loan to the DCG as the reason for the continued holdup that Silbert dismissed. He tweeted that DCG carries no $1.675 billion advanced by Genesis Trading. He restated that DCG has not defaulted payments on the outstanding loans.
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