Genesis Global Trading Inc. has been feeling the heat of the crypto crash that has been plaguing the industry over the past several months. The firm announced today that it was laying off 30% of its workforce, as first reported by the Wall Street Journal.
This round of layoffs is the second since August, when the company first laid off a reported 20% of its staff in an initial cut while CEO Michael Moro stepped down. Genesis is facing continued financial turmoil due to loans it supplied to cryptocurrency hedge fund Three Arrows Capital and trading firm Alameda Research. Three Arrows was forced to liquidate last summer leading to Genesis' first round of layoffs, and this compounded with FTX's own Sam Bankman-Fried using customer funds for Alameda Research likely led to Genesis' second round of cuts.
Genesis now has a staff of 160, down from 245 before the first layoffs, according to Reuters.'As we continue to navigate unprecedented industry challenges, Genesis has made the difficult decision to reduce our head count globally. These measures are part of our ongoing efforts to move our business forward,' a spokeswoman for Genesis said to the Wall Street Journal. Genesis was also involved in a recent lawsuit between crypto investors and the platform Gemini, which was founded by Tyler and Cameron Winkelvoss.
Gemini touted high-yield savings accounts—upwards of 8% interest in some cases. Gemini generated those lofty returns by allowing Genesis to loan Gemini customer funds to institutional borrowers. The lawsuit alleges that Gemini was then unable to return funds to its customers as a result of financial distress amongst the now infamous FTX collapse.
Genesis is far from the only cryptocurrency firm facing job cuts and an uncertain future as the crypto winter drags on. Coinbase, which recently reached a $100 million settlement with the New York Department of Financial Services, announced it was laying off 1,100 employees, or 18% of its workforce, this past June.