Recently, the crypto broker Genesis announced a massive layoff of roughly 30% of the company’s workforce.
Since November, the exchange is facing serious economical issues. Following the collapse of FTX, Genesis went through several issues, to the point of pondering bankruptcy.
In a statement issued to The Wall Street Journal, a Genesis spokesperson talked about how the company had to face several “unprecedented industry challenges,” in order to keep functioning. “These measures are part of our ongoing efforts to move our business forward.”
For that reason, Genesis laid off about 60 employees, with only 145 workers remaining under the exchange.
What draws attention is that this is the second massive layoff Genesis went through in the span of 6 months. In August, the exchange fired 20% of its positions, which caused the then CEO Michael Moro to resign.
Losses From FTX Collapse
Along with the already bankrupt BlockFi, Genesis is unquestionably one of the biggest losers after the FTX meltdown.
The company suffered billions in losses from loans it had with the FTX-sister companies, Alameda Research and Three Arrows Capital. Both of these businesses already filed for bankruptcy after FTX.
This caused a massive snowball effect which eventually led to today, Genesis having to let go of nearly 50% of its workforce in the span of six months.
Genesis Under Investigation
The turmoil of events surrounding the exchange is also caused by a federal investigation under Genesis’ business practices. Many state authorities in the United States are currently investigating whether the crypto trading business Genesis Global Capital violated any securities laws.
Alabama Securities Commission Director Joseph Borg stated that his agency, as well as numerous other states, are participating in the investigations.
The parties are concerned about whether Genesis and other businesses encouraged people of their respective states to invest in crypto assets without the necessary registrations. Borg did not identify the other firms under investigation.