Crypto lender and over-the-counter dealer Genesis is laying off 20% of its workforce, while CEO Michael Moro is also stepping down.
In a press release, Genesis revealed that COO Derar Islim will serve as interim CEO, and announced a new board member, Chief Risk Officer, Chief Compliance Officer, and Chief Technology Officer.
Genesis has been struggling since the collapse of Three Arrows Capital (3AC), the hedge fund formerly managed by Kyle Davies and Su Zhu. Genesis was one of 3AC’s largest creditors but the fund entered bankruptcy in early July.
And things could have been worse. Genesis was in very real danger of insolvency until Genesis’ parent company, Barry Silbert’s Digital Currency Group, stepped in to take over Genesis’ 3AC losses.
Filings in a Singaporean court indicate that Genesis’ Asia-Pacific division made a loan of $2.36 billion to 3AC. Genesis has filed at least $1.2 billion worth of claims against 3AC.
Moro said that Genesis sold crypto collateral and protected its downside when 3AC failed to meet a margin call. The loan required a seemingly conservative weighted-average margin of 80%. However, Moro didn’t reveal any details about the loan amount or the size of Genesis’ losses.
Despite being 3AC’s biggest creditor, Digital Currency Group claimed its balance sheet remained strong in a statement to Bloomberg.
Michael Moro led Genesis crypto from 2015
Michael Moro has served as the COO at Genesis since Digital Currency Group rebranded the trading division of SecondMarket in 2015. Moro previously acted as VP and Director of SecondMarket. Although he’s departed as Genesis CEO, he’ll remain as advisor.
Moro previously served as a research manager at Pluris Valuation Advisors and an associate at banking giant Citi.
Silbert, meanwhile, founded Digital Currency Group by bringing together five companies, including Genesis Trading. Grayscale, the trust manager behind the world’s largest bitcoin trust, GBTC, anchors Silbert’s conglomerate. Digital Currency Group has subsequently invested in many well-known crypto companies like BitPay and Chainalysis.
Although Genesis claims that its losses from 3AC and TerraUSD are survivable, Moro apparently decided that it was time to step aside. With one in every five workers at Genesis laid off and its leadership team overhauled completely, the company’s future might look entirely different from its past.