The situation of the Digital Currency Group (DCG) does not seem to be improving: Genesis, one of its subsidiaries, finds itself forced to lay off 30% of its staff and does not rule out placing itself under Chapter 11 protection in the near future. the United States. The company had already separated from 20% of its employees last summer, but now accumulates financial difficulties.
Genesis once again separates from part of its workforce
The prospect of any way out for Genesis, a subsidiary of Digital Currency Group (DCG), seems to be shrinking. According to information from the Wall Street Journal, which quotes “people familiar with the matter”, the company has laid off 30% of its staff and is even considering filing for bankruptcy.
This is the second wave of layoffs at Genesis, which had already found itself forced to lay off 20% of its workforce last summer, in parallel with the resignation of Michael Morothe general manager of the company.
A spokesperson for Genesis said the company prioritizes the preservation of its customers’ assets, and does not rule out filing for U.S. Chapter 11 bankruptcy protection, which would allow the company to continue its activity time to develop a strategy so that she can repay her debts.
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Debts which, moreover, turn out to be considerable, since we learned last month that Genesis owed more than $900 million to the cryptocurrency exchange platform Gemini, which brings its total amount of known debts at $2.8 billion.
On this subject, Cameron Winklevoss, CEO of Geminiaccused Digital Currency Group of blocking these funds – necessary for the proper functioning of Gemini – voluntarily, a situation which should be clarified during a meeting between the two parties on January 8th.
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Genesis entangled in quicksand
A consortium initiated by Gemini is trying to find a way out for Genesis, which itself has sought to raise $1 billion, so far without success. We said earlier, Genesis has nearly $3 billion in outstanding loansparticularly within its parent company, Digital Currency Group, and its bankruptcy could have serious consequences.
DCG, which, it should be remembered, notably owns the media specializing in cryptocurrencies CoinDesk as well as Grayscale, a company that offers various cryptocurrency investment vehicles. The latter is also in serious trouble as ETHE, one of its flagship products, is seeing a discount of more than 60% against ETH.
So it’s not just Genesis as an individual subsidiary that’s in trouble, but indeed the entire Digital Currency Groupwhich continues to suffer the various blows of the cryptocurrency market, especially in relation to the investment fund Three Arrows Capital (3AC), in which Genesis was particularly involved.
But the fatal blow came when FTX declared bankruptcy, forcing it to halt its lending operations and to stop the withdrawals of its users on its platform.
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Source: Wall Street Journal
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Passionate about the world of decentralized finance and the novelties brought by Web 3.0, I write articles for Cryptoast to help make blockchain more accessible to everyone. Convinced that cryptocurrencies will change the future very soon.
Maximilien Prue
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