As the cryptocurrency market collapses, digital asset brokerage Genesis said on Wednesday that CEO Michael Moro is stepping down and that the company is cutting 20% of its personnel.
According to a statement from Genesis, Derar Islim, the operations director, will serve as interim CEO while the company looks for a permanent replacement.
Genesis is a division of Barry Silbert's conglomerate and cryptocurrency investor, Digital Currency Group. Genesis entered the market initially, opening the first over-the-counter cryptocurrency trading desk in 2013, and later developed into a significant lender.
The company had a significant increase in its book during the 2021 crypto boom. Loan originations climbed sevenfold to $131 billion, and the company hired 22% more people to reach 170. That number had increased to 260 by mid-2022. About 52 jobs would be lost with a 20% reduction.
The sharp shift in the cryptocurrency market this year, which sent the prices of bitcoin and ethereum down, destroyed enterprises whose operations were directly dependent on the value of digital assets. Hedge firm Three Arrows Capital, or 3AC, as well as the brokerage Voyager Digital and the cryptocurrency lender Celsius Network, declared bankruptcy.
Genesis has fared better than other market participants in weathering the storm, although the company sustained considerable losses as a result of its exposure to 3AC. Due to loan breaches, Genesis filed a $1.2 billion claim against 3AC in July.
In a report on second-quarter market observations, the business stated that "Genesis was not immune to the market collapse and the damage to overall mood." "Genesis has loan exposure to Three Arrows Capital, as we have indicated publicly.
Genesis was able to continue being a source of strength for our clients because our parent company, DCG, took on the obligation associated with losses on these loans and preserved our balance sheet.
Moro, who joined Genesis in 2015 and became CEO the following year, will continue to work during the change in leadership, according to Genesis. The business claimed to have just employed new leaders to fill the positions of chief technology officer, chief risk officer, and chief compliance officer.