Cryptocurrency lender Genesis Global Trading has laid off 30% of its employees and is considering filing for bankruptcy. This is reported by The Wall Street Journal, citing informed sources.
Photo: borgexpert.com 1
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What is known
The reductions affected all departments, only on January 5, the company laid off 60 employees. Now Genesis employs 145 people.
The problems of Genesis, one of the largest cryptocurrency lenders, began with the bankruptcy and liquidation of the cryptocurrency hedge fund Three Arrows Capital, to which the company provided a $2.4 billion loan.
Just a few days after the collapse of the hedge fund Genesis laid off 20% of its employees, and the company’s CEO Michael Moreau left his post.
The second blow to the financial stability of Genesis was the collapse of the FTX crypto exchange and its related company Alameda Research in November last year. Genesis loaned Alameda at least “hundreds of millions of dollars”, according to WSJ sources.
Read: Rise to $250 thousand or fall to $5 thousand: what awaits bitcoin in 2023
Shortly after the FTX crash, on November 16, Genesis announced it was suspending lending and repayments.
In order to save the situation, Genesis tried to attract investments for $1 billion. In particular, the company turned to Moelis & Co. investment bank for help, WSJ notes.
However, Genesis and Moelis are now considering filing under Section 11 of the US Bankruptcy Code. The article provides for temporary protection from creditors in order to enable the company to continue to operate.
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