The CEO of institutional cryptocurrency broker Genesis Global Trading, Michael Moro, has announced his resignation and that the company will lay off 20% of its staff. The decision represents additional fallout from the failure of Three Arrows Capital, a company to which Genesis had a sizable exposure.
Genesis CEO To Resign As 20% Of Workforce Is Axed
In an effort to restructure and recover from exposure to failing crypto hedge fund Three Arrows Capital and a major decline in the market for digital assets, Genesis has announced the departure of CEO Michael Moro.
According to a Wednesday official press release, the company’s staff was reduced in addition to Moro’s departure. The cryptocurrency broker has 260 workers as of this writing. 20% of the company’s employment, or 52 employees, are anticipated to be cut starting today.
In July, the business, which is controlled by the troubled 3AC, launched a $ 1.2 billion lawsuit against it. Moro claims that despite 3AC’s failure to make a margin call, Genesis was able to reduce losses and that DCG has taken on part of the firm’s liabilities. Genesis is the most recent cryptocurrency company to be impacted by the market downturn that has pushed some well-known companies to reduce its employees.
7/ Since our founding in 2013, Genesis has successfully navigated periods of intense market volatility. Looking ahead, we will continue to support the needs of our clients and counterparties as we enter the next phase of the industry’s evolution.
— Michael Moro (@michaelmoro) July 6, 2022
In the interim while the firm looks for Moro’s long-term replacement, the current chief operational officer Derar Islim, who joined the company in 2020, will take over for Moro.
In an effort to strengthen the “company’s overall risk management,” Genesis announced the employment of new chief risk officers, chief compliance officers, chief technology officers, chief legal officers, and chief finance officers.
These include Chief Technology Officer Matthew Johnson, Chief Risk Officer Michael Patchen, Chief Compliance Officer Michael Patterson, Chief Legal Officer Arianna Pretto-Sakmann, and Chief Financial Officer Alice Chan, all of whom “recently joined Genesis.” And Tom Conheeney, formerly the CEO of Point72 Asset Management, will join as a senior advisor and sit on the board of directors for the firm.
In 2013, the Digital Currency Group launched Genesis Trading as a cryptocurrency broker. The company is recognized with founding the nation’s first over-the-counter bitcoin trading division.
BTC/USD trades at $ 23k. Source: TradingView Genesis Filed A $ 1.2 Billion Claim Against 3AC
It’s not clear if the crypto market fall had an impact on Genesis’ strategy. The firm disclosed in July that it had exposure to Three Arrows Capital, a company linked to Terra that a British court later ordered to be liquidated. In order to make sure Genesis had enough money for its operations, Digital Currency Group claimed it had taken on some of the liabilities owing by 3AC.
As at the date of publication, financial consultancy firm Teneo Restructuring is overseeing the liquidation of 3AC.
Many fintech companies have announced changes to their leadership in the midst of a tumultuous cryptocurrency market. Ignite CEO Peng Zhong announced his departure on July 1 after working there since 2015. On August 2, Michael Saylor made the decision to resign as CEO of MicroStrategy, the business intelligence company that has been a major investor in Bitcoin (BTC) since 2020.
Featured image from iStockPhoto, Charts from TradingView.com