According to a new report, Genesis Trading, the lending arm of the major Digital Currency Group (DCG) has started a new wave of layoffs, which will result in a 30% reduction in its workforce. This has led to a strong demonstration of the lack of funds that the major crypto is currently facing and also raises doubts about its support in the crypto market.
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Genesis 2nd Round of Layoffs
The company suffered a lot due to borrowing money from commercial companies such as Alameda Research and the main cryptocurrency hedge fund Three Arrows Capital (3AC) in 2022. Due to the financial problems that these companies are facing , financial claims are filed in court as cryptocurrencies. don’t blow your nose; erasing all their previous gains.
As previously reported in CoinGape, Genessis laid off another 20% of its 260 employees in the summer of 2022. However, the failure of FTX made things worse for the company. According to sources, Genesis has extended credit worth at least several hundred million dollars to FTX’s sister business, Alameda Research, before the latter’s fall in November. He also made a large donation to the 3AC hedge fund, which is said to be worth as much as $2.4 billion.
A spokesperson for Genesis said:
As we continue to face unprecedented challenges in the industry, Genesis has made the difficult decision to reduce our operations worldwide. These measures are part of our ongoing efforts to improve our business.
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Genesis and The Edge of Failure?
On November 16, Genesis temporarily stopped issuing new loans and principal repayments. Due to the Genesis action, Gemini, a cryptocurrency exchange that collaborated with Genesis on a seed system, suspended withdrawals worth $900 million from their Earn program.
To survive, Genesis even turned to investors for a $1 billion emergency loan. Efforts have been made to raise funds from equity firms such as Apollo Global Management and major crypto exchange Binance. This week, the president of the company, Derar Islam, told customers that the company is trying to find a solution for lending and borrowing, although it will take more time to do so.
This comes after Gemini co-founder Cameron Winklevoss wrote an open letter detailing the delay in relaunching, which they owe to their customers. Rising interest rates and concerns about an economic slowdown caused investors to shun riskier assets, which boosted the cryptocurrency market. In addition, the recent lack of funding and recent compensation has caused many to doubt the viability of Genesis and the broader crypto industry.