Crypto lender Genesis lays off 20% of its workforce; CEO departs
Crypto broker Genesis is the latest casualty of a $2 trillion digital-asset market wipeout following its exposure to the now-bankrupt crypto hedge fund Three Arrows Capital. On Wednesday, Genesis announced its CEO Michael Moro is stepping down and the company is cutting 20% of its 260-person workforce or 52 jobs.
Derar Islim, who joined Genesis in 2020 and has overseen the development of strategy and key core functions, will take over as interim CEO while the company searches for a permanent replacement, the company said in a statement.
The layoffs were announced as part of the firm’s leadership changes that resulted in the departure of Moro. The announcement comes a few weeks after it was revealed in court filings that the crypto lending firm lent $2.4 billion to the beleaguered Three Arrows Capital.
In addition, Genesis has made key executive leadership hires to further strengthen its governance and position the firm for the future. Chief Risk Officer Michael Patchen, Chief Compliance Officer Michael Patterson, and Chief Technology Officer Matthew Johnson have recently joined Genesis. Alice Chan, Chief Financial Officer, and Arianna Pretto-Sakmann, Chief Legal Officer, round out the expanded leadership team focused on strengthening the company’s overall risk management in partnership with Genesis’ sales and trading leadership.
“Our clients look to Genesis to provide integral capital and execution services across their digital asset portfolios,” said Derar Islim, Interim Chief Executive Officer. “The changes and investments we’re announcing today affirm our commitment to operational excellence as we continue to expand our services to meet the needs of our clients today and into the future.”
“I’m thrilled to join the Genesis Board. I also look forward to working with Derar and the team to bolster key areas of Genesis and to expand the firm’s market position with more traditional financial institutions and alternative asset managers looking for investment opportunities in digital assets,” said Tom Conheeney, Genesis’ Senior Advisor.
“Since we launched the first OTC bitcoin trading desk in 2013, sophisticated investors have come to Genesis to provide liquidity, lending, and custody services for their digital assets. It has been an honor to lead Genesis for nearly a decade and I look forward to supporting the company’s next phase of growth,” said Michael Moro.
Genesis is a wholly-owned subsidiary of Digital Currency Group, the crypto investor and conglomerate founded by Barry Silbert. Since its launch a few years ago, Genesis has emerged as a leading digital asset trading and lending firm with hundreds of institutional clients around the world
The firm was early in the market, launching the first over-the-counter crypto trading desk in 2013, and then expanding to become a major lender. During the 2021 crypto boom, Genesis originated more than $131 billion in loans. The company also increased its headcount by 22% to 170 employees. By mid-2022, that number had increased to 260.
Three Arrows’ margin call has already rippled through the entire crypto market. One of the affected crypto companies is crypto lender BlockFi, which recently announced that it has liquidated its position in Three Arrows
In June, the embattled Three Arrows Capital was ordered into liquidation by a court in the British Virgin Islands. Bloomberg also reported that the firm is now planning to sell its asset including holdings in crypto startups.