Genesis Global Trading, a division of DCG that was severely harmed by the demise of FTX, has stranded funds of up to $175 million. Genesis cut another 30% of its workforce yesterday, and now it's thinking about declaring bankruptcy.
Genesis recruited investment firm Moelis & Company to examine Chapter 11 bankruptcy cases. According to a Genesis spokeswoman, the action is intended to "preserve customer assets and advance the business."
In the fall of 2022, Genesis was adversely affected by the failure of FTX and its sibling hedge fund Alameda Research.
Alameda received millions of dollars from Genesis just before it failed. In November, Genesis froze client funds following Alameda's bankruptcy.
After the extra 30% job reductions on Thursday, Genesis had 145 workers. Genesis had 260 employees prior to the August layoffs.
As many interrelated segments of the business catch fire, Genesis is one of many cryptocurrency companies attempting to handle the fallout. Genesis pleaded with investors for a $1 billion emergency loan before it stopped all transactions.
These are the most recent events from Genesis, whose lending division was suspected of having financial problems after blocking withdrawals starting in mid-November 2022—just a few days after FTX declared bankruptcy.
Additionally, due to murky internal activities, Genesis' parent firm, Digital Currency Group (DCG), was also engulfed in a crisis and rendered insolvent.
Genesis received a "ultimatum" from $900 million creditor Gemini, ordering it to provide a solution by January 8 after being accused of purposefully "buying time" to find an impractical way out.
In response, Genesis' CEO wrote an investor letter on January 4 in which he said that the company "needed additional time" to deal with the situation. There has been no action done thus far.
