Crypto Broker Genesis Slashes Workforce and Announces CEO’s Exit

On Wednesday, digital asset broker Genesis made several announcements, the first of which was that its chief executive Michael Moro, was stepping down from his position.

In addition, the crypto broker also announced that it was cutting down its workforce by 20%, as it became the latest casualty of the crypto winter that seems to have struck the market.

Background

The company’s statement said that its operating chief, Derar Islim would take the position of interim CEO for now, while they continue their search for a permanent replacement.

Barry Silbert founded the conglomerate and crypto investor Digital Currency Group and Genesis is a unit of the said conglomerate.

The crypto broker entered the market early on, as it introduced the first over-the-counter crypto trading desk back in 2013 and then eventually expanded to become a prominent lender in the market.

The brokerage saw its book boom significantly when the crypto market was growing back in 2021. There was a sevenfold increase in loan origination, as it hit a whopping $131 billion.

Moreover, the company also expanded its workforce by 22% and its total headcount reached 170 employees.

This number had increased to 260 by the middle of this year and now a reduction of 20% means that about 52 employees will lose their jobs.

Crypto market downturn

This year has seen a rapid downturn in the crypto space, which has sent the prices of leading cryptocurrencies such as bitcoin and ethereum into decline.

Furthermore, this crypto winter has also wiped out a number of companies that had their business directly connected to the price of cryptocurrencies.

Some of the companies were driven to filing for bankruptcy including crypto hedge fund, Three Arrows Capital (3AC), crypto lending platform Celsius Network and broker Voyager Digital.

While Genesis was in the position to survive the market turbulence better than its peers, the company did suffer from massive losses because of its exposure to the hedge fund 3AC.

As a matter of fact, a claim of about $1.2 billion was filed by Genesis against 3AC because of unpaid loans.

The company’s statement

The company said in a report that they had not been completely immune to the drop in the market and the overall damage that investor sentiment had suffered.

It said that they had publicly disclosed their exposure to 3AC and the liability that had resulted from these losses had been assumed by Genesis’ parent company, GCG.

This had allowed Genesis to keep its balance sheet healthy and it could continue operating for its clients.

The company’s CEO, Moro, joined the company back in 2015 and had taken his role as chief executive in the next year.

Genesis said that he would continue working at the company during the leadership transition. It also disclosed that it had made hired some new executives recently.

These include a chief technology officer, a chief compliance officer, and a chief risk officer.