Earlier we wrote that Genesis Global Capital has suffered from the FTX collapse and that GBTC also experienced serious troubles and had to sell Bitcoin for half-price. These were really bad signs for the DCG. Now the story continues.
Genesis stopped redemptions for all clients in November. This situation also made Gemini pause redemptions, as it had earlier lent $900 million of client funds to Genesis to generate yields for its Gemini Earn accounts. So far Gemini is still waiting to get back its funds and has stated that they are completely dissatisfied with the current situation, in particular with Genesis and DCG’s "bad faith stall tactics":
This might lead to the bankruptcy of the company in the near future. Recently Bloomberg reported that Genesis’s Interim Chief Executive Officer, Derar Islim, had said in a letter to clients that Genesis needs more time to settle its financial troubles:
“While we are committed to moving as quickly as possible, this is a very complex process that will take some additional time. We believe we can arrive at a solution.”
CNBC reported that according to someone with insider knowledge of the matter, the company has cut its workforce by 30% to around 145 employees, as it faces increasing pressure from creditors. The company spokesman said:
“As we continue to navigate unprecedented industry challenges, Genesis has made the difficult decision to reduce our headcount globally. These measures are part of our ongoing efforts to move our business forward. We sincerely appreciate the hard work of our talented and dedicated team as we continue to work to identify the best outcome for Genesis’s business, clients and employees for the long term.”
Layoffs quite often indicate upcoming troubles but also [in an ideal world] might help the company to eliminate further financial troubles. We’ll keep a close eye on the situation as DCG is one of the largest crypto companies and its crash might severely worsen the crypto winter.