As the crypto lending industry faces increasing financial pressure, Genesis Trading, a subsidiary of Digital Currency Group (DCG), announced a 30% reduction in its workforce, as reported by CNBC.
The move followed the layoff of 20% of Genesis staff last year and the replacement of its CEO. The total number of job cuts now stands at 145.
What Happened: The decision came after Genesis hired bankruptcy professionals following the collapse of FTX and Alameda Research, a major client of the company. In response to the crisis, Genesis froze redemptions for all clients and was said to have sought an emergency loan of $1 billion.
These events have attracted criticism from Cameron Winklevoss, CEO of crypto exchange Gemini, who claimed DCG owed $1.675 billion to his company's customers and accused DCG CEO and founder Barry Silbert of engaging in "bad faith" tactics.
In an attempt to resolve a dispute between their two companies — Gemini Trust Co. and Genesis Global Capital— as it related to the collapse of the crypto exchange FTX, Winklevoss asked Silbert to publicly commit to finding a resolution by Jan. 8, 2023.
Why It Matters: Silbert denied the allegations but his problems don't stop there. DCG subsidiaries Grayscale Ethereum (OTC: ETHE) and Bitcoin (OTC:GBTC) Trusts had consistently been at a discount since November 2021 and lost significant value due to the decline in Ethererum (CRYPTO: ETH) and Bitcoin (CRYPTO: BTC).
Grayscale Ethereum Trust had a record discount of 59.39% compared to the price of Ethereum, while Grayscale Bitcoin Trust's shares were trading at a 45.17% discount to the price of Bitcoin.
In an effort to improve liquidity, Grayscale had been seeking approval to convert these cryptocurrency funds into exchange-traded funds (ETFs), which would allow them to be traded on public stock markets.
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