As pressure builds, crypto firm Genesis cuts 30% of workforce

Cryptocurrency firm Genesis has cut 30 percent of its workforce in a second round of layoffs in less than six months, Reuters has reported, citing a person familiar with the matter as pressure builds on crypto industry executives to cut costs in the wake of a downturn.

“As we continue to navigate unprecedented industry challenges, Genesis has made the difficult decision to reduce our headcount globally,” a spokesperson for the company confirmed.

The layoffs were first reported by the Wall Street Journal, which also said Genesis is considering filing for Chapter 11 bankruptcy in the United States.

The firm is working with investment bank Moelis & Co to evaluate its options, the report said, citing people familiar with the matter.

“We continue working with our advisors, in collaboration with [parent company] Digital Currency Group and advisors appointed by various client groups, to evaluate options to preserve client assets and move the business forward,” the Genesis spokesperson said in an emailed statement.

Several firms have suffered from waning investor appetite for crypto after major exchange FTX blew up in September.

Earlier on Thursday, crypto-focused bank Silvergate Capital Corp also said it was slashing headcount by 40 percent or about 200 employees as it tried to rein in costs. Its stock crashed more than 42 percent as it reported on Thursday a sharp drop in fourth-quarter crypto-related deposits as spooked investors pulled out more than $8bn in deposits.

New York-based Genesis also laid off 20 percent of its employees in August. The company now has a headcount of 145, the source said, compared to 260 before the two rounds of layoffs.

The crypto firm’s lending arm, Genesis Global Capital, froze customer withdrawals in November, citing “unprecedented market dislocation” following the collapse of major crypto exchange FTX.

In a letter to clients on Wednesday, Genesis said it was finding a solution to the crisis at its lending business but would need more time.

Higher interest rates and worries of an economic downturn have also piled pressure on the crypto industry as investors flee risky assets.