Sources: Genesis Global laid off 30% of its staff, after a 20% cut in 2022, leaving the crypto lender with 145 workers, and is considering filing for bankruptcy

Firm suffered steep losses from loans it supplied to Alameda, Three Arrows — Massive crypto lender Genesis Global Trading Inc. laid off 30% …

Wall Street Journal 2023-01-06

Context & Ripple Effects

Genesis had already suspended redemptions and new loan originations at its lending unit while leaving trading and custody unaffected. The latest staff reduction follows reported losses tied to loans to Alameda and Three Arrows, turning a liquidity interruption into a broader retrenchment.

Related coverage shows Genesis was also seeking more than $1B for the lending unit and warning investors that bankruptcy might be necessary. The layoffs therefore matter as an operating response to a funding shortfall, not as an isolated workforce change.

First-order effects

Genesis operates with 145 workers after the 30% cut, reducing its capacity while its lending unit remains closed to redemptions and new originations.
Potential investors in the lending unit face a company explicitly weighing bankruptcy after its effort to raise fresh funding.

Second-order effects

Genesis’s trading and custody businesses, which remained operational after the lending halt, become the group’s remaining active services as the lending operation contracts.
Alameda and Three Arrows loan losses become a sharper concern for Genesis stakeholders because workforce cuts and a funding search signal that internal resources are insufficient to absorb them.

Third-order effects

The episode points to crypto lenders’ dependence on confidence and liquid funding: once redemptions stop, cost cuts and capital raises can become successive steps toward formal restructuring, as Genesis later filed for Chapter 11.

The trend: Crypto lending is moving from rapid balance-sheet expansion toward restructuring when concentrated counterparty losses collide with redemption pressure.

Discussion

@watcherguru @watcherguru on x
JUST IN: #Crypto lender Genesis fires 30% of its staff.
@fxmacro @fxmacro on x
genesis cannot call the loans anyone who says so is not in the loop and not spoken to any of the bankers involved ...575mio due in may and the 1.1b is payable over 10 years and why it doesn't make sense for gemini to push them into bankruptcy yet https://twitter.com/...
@shaughnessy119 Tommy Shaughnessy on x
DCG Situation: - DCG Owes $2.025B - Genesis can call their $1.675B loan - Genesis owes $900M to Gemini DCG Liq - Grayscale $10B AUM x 2% = $200M x 3x multiple = $600M - GBTC/ETHE Holdings = 9.7%/3.8% = $629M with discount, $1.17B at Par - VC book = Firesale values in a bear https…
@tomkeene Tom Keene on x
key insight is paragraph 11, ‘...its yield program.’ https://www.wsj.com/...
@lookonchain @lookonchain on x
1/ Genesis Trading eliminates 30% of staff in latest cuts and may have to file for bankruptcy protection. https://www.bloomberg.com/... We analyzed 6 addresses of Genesis Trading:👇 - Genesis currently holds $364M assets. - Alameda and 3AC are the biggest counterparties of Genesis…
@crypto @crypto on x
Digital-asset brokerage Genesis Global Trading laid off more than 60 employees in the latest sign of upheaval at the troubled firm https://www.bloomberg.com/...
@lookonchain @lookonchain on x
2/ 6 addresses of Genesis Trading holds $364M assets. Including: - 219,749 $ETH($274M) - 35M $USDC - 26,667 $BNB($6.8M) - 126,989 $COMP ($4M) - 1M $APE($4M) - 8.14M $SAND($3.4M) - 2.9M $USDT - 2.65M $USDP - 40,448 $AAVE($2.2M) - 6.76M $MANA($2.1M) - 2M $BUSD ... https://twitter.c…
@gwestr Greg Wester on x
Watching the Winklevoss twins squander the money they stole from Zuck is chef's kiss https://www.wsj.com/...
@lookonchain @lookonchain on x
4/ Genesis Trading had nearly $7B in ETH/USDC/USDT/BUSD trading volume with Alameda and 3AC. So is Genesis Trading bankruptcy imminent? https://twitter.com/...
@nouriel Nouriel Roubini on x
Crypto-Apocalypse accelerates☄️💥🔥 Crypto Lender Genesis Considers Bankruptcy, Lays Off 30% of Staff Firm suffered steep losses from loans it supplied to Alameda, Three Arrows https://www.wsj.com/...
@aristyescuder Jaime Aristy Escuder on x
Crypto lender Genesis lays off 30% of staff and considers bankruptcy. Genesis suffered steep losses from loans it supplied to the now-defunct trading firm Alameda Research and crypto hedge fund Three Arrows Capital. https://www.wsj.com/...
@kateclarktweets Kate Clark on x
Scoop: Genesis parent company Digital Currency Group just shut down its $3.5 billion wealth management division as the crypto contagion continues. https://www.theinformation.com/ ...
@kateclarktweets Kate Clark on x
Update: A DCG spokeswoman said HQ is winding down because of the “state of the broader economic environment and prolonged crypto winter presenting significant headwinds to the industry.” She said the company looks forward to “potentially revisiting the project in the future.”
@mikemcdonald89 Mike McDonald on x
The funny part about people buying 100k BTC in a few years is somehow they'll feel like they like bitcoin that much more than the people buying 17k here https://twitter.com/...
@baddcompani @baddcompani on x
Poof!! https://twitter.com/...
@amir Amir Efrati on x
NEW: Barry Silbert / DCG's wealth management arm, which recently had $3.5B in AUM, is no more. Scoop ⁦@KateClarkTweets⁩ https://www.theinformation.com/ ...
@theinformation @theinformation on x
Barry Silbert's DCG, the parent of Genesis and Coindesk, has shuttered its wealth management division, HQ Digital. https://www.theinformation.com/ ...
@kateclarktweets Kate Clark on x
HQ launched last year and was initially described as a “re-envisioned multi-family office.”
@deezefi DeeZe on x
No need to manage wealth when there is no wealth to manage anymore Smart https://twitter.com/...
@swolecialism @swolecialism on x
[hunger Games Cannon] https://twitter.com/...
@fejau_inc @fejau_inc on x
If only you knew how bad things can continue to get https://twitter.com/...
@curvethots @curvethots on x
If DCG, Genesis and Greyscale has to all unwind we're in for one more big week ahead https://twitter.com/... https://twitter.com/...
@im_goomba @im_goomba on x
The last domino? https://twitter.com/...

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