Genesis is joining the likes of Coinbase cutting the global workforce by more than 30%. Could this spell trouble for the beleaguered crypto firm?
The cryptocurrency firm’s lending arm, Genesis Global Capital, froze customer withdrawals on 16 November, citing “unprecedented market dislocation” following the collapse of major crypto exchange FTX.
Genesis has also informed its clients that it needs more time to come up with a solution for the troubles at its lending unit.
What the CEO of Genesis Had to Say
“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,” interim Chief Executive Officer Derar Islim wrote in a letter.
“We will continue to give you updates on meaningful developments, including any updates on timing.”
The company is well known to have been in an unstable situation financially since the collapse of FTX, large debts have put the company in trouble. On 4 January, however, the company announced another piece of bad news, Genesis faced staff cuts of about 30%.
Given the huge debts, this staff cut appears to be a solution to remedy the obligation to return money to the Winklevoss brothers’ Gemini exchange and many other companies. Genesis’ efforts to reduce its debt seem very serious, though it is always sad when the workforce loses out.
Cameron Winklevoss Sounds Off in Public Letter
The clock is ticking, and despite attempts, Genesis still has not paid off its debt, prompting Cameron Winklevoss, one of Gemini’s founding twins, to write a public letter.
In the contents of the letter, Cameron points the finger at Barry Silbert, the CEO of Digital Currency Group, where he urges him to solve Genesis’ liquidity problems and settle the debt with Gemini.
“Earn users are tired. They are afraid. Many are now in dire straits. Yet despite all they have had to endure, they have been extraordinarily patient and supportive. But they can only take so much more. They deserve a resolution to recover the assets they have lent to publicly commit to working together to resolve this problem by January 8, 2023. We are ready and willing to work with you, but time is running out.
This ultimatum appears to be a last resort for the Winklevoss twins. They’re now in the midst of a crisis and tired of various attempts to approach Barry Silbert and his companies.
“The asset deficit was caused by the long-term risk of DeFi investment, the instability of our business model after the loss of assets, and the illiquidity of the Midas token.”
Gemini’s exchange president believes that too much time has passed since the collapse of FTX. This puts Genesis in crisis, and he wants his money back.
The spirit that moves the Winklevosses to this point is the strong desire they have to repay their users. They are now tired of the months that have passed without getting their assets back.
The situation in which Digital Currency Group and Genesis now find themselves is very critical. A probable investigation would be another step that would move Gemini away from its claim.
Is There a Way Back for Genesis?
Could we see a return of the Genesis group? Or will the Winklevoss twins have to hand over the keys to the Genesis kingdom in bankruptcy court?
One thing is for certain whether it’s the Winkelvoss Twins, Sam BankmanFried, or Binance’s CZ. It’s about time that these tech leaders get their act together and start acting like ethical and responsible CEOs.
For too long have we allowed leaders unlimited reign? This has only led to the customers being left holding the bankruptcy court bag. Is it time for a change?
