Crypto lender Genesis Trading has slashed its employee headcount by 30 percent in the wake of the ongoing business environment, challenges, increasing pressure from creditors, and the possibility of going bankrupt. Genesis Trading, the crypto lending arm of Barry Silbert’s Digital Capital Group, will see its latest decision affect 60 positions in an attempt to be frugal with its operations and avoid filing for bankruptcy.
The crypto lender already cut off 20 percent of its workforce last year and even replaced its CEO, all in an attempt to shield itself from the macroeconomic conditions that were affecting businesses. Barry Silbert’s conglomerate which includes the Greyscale Bitcoin Trust (GBTC) and mining company Foundry, was badly hit by the market conditions in 2022 as well as the bankruptcy of crypto hedge fund Three Arrows Capital.
The latest development follows a series of events in the crypto world which has seen “surviving” companies doing all they can to remain in business. Like others, Genesis Trading was affected by the collapse of the crypto exchange platform FTX freezing redemptions not so long after it filed for bankruptcy protection in November 2022. FTX was a significant client of the crypto lender. Prior to FTX’s collapse, other crypto lenders such as Celsius, and Voyager all filed for bankruptcy as a result of the crash in crypto prices and the macroeconomic challenges. Following FTX’s collapse, crypto exchanges like BlockFi have also filed for bankruptcy.
Genesis Trading’s parent company Digital Capital Group has been under severe criticism from prominent investors over the length of the withdrawal freeze and a lack of action from its executives.
Following the latest event and FTX’s collapse which shook the crypto industry, more crypto businesses are expected to file for bankruptcy in the near future. The world’s biggest crypto exchange Binance has, however, set up a $1 billion crypto industry fund to assist struggling players. “As a leading player in crypto, we understand that we have a responsibility to lead the charge when it comes to protecting consumers and rebuilding the industry. That is why we have established the Industry Recovery Initiative (IRI), a new co-investment opportunity for organizations eager to support the future of Web3,” Binance said.