Michael Moro, CEO of Genesis Trading, will step down, as pressure mounts over exposure to Three Arrows Capital (3AC).
The New York firm, a household name in institutional cryptocurrency lending has announced a 20% headcount reduction effective August 17, 2022.
This comes on the heels of an announcement by the company that it had borrowed $40bn in the second quarter, down 9% from the first quarter, as institutional interest in lending cooled amid a recession in the crypto market.
The cryptocurrency market has fallen from a peak of around $3 trillion to around $1.12 trillion at press time.
Genesis derivatives trading fell 4% from the first quarter.
Continuous Commitment to Operational Excellence
The Director of Operations will assume the position of Director General for the time being. At the same time, the company is looking for a permanent replacement for Moro, who will be an advisor during the hiring process. Tom Conheeny will join the Genesis board, along with risk, compliance, and technology executives.
Derar Islim, Chief Operating Officer, said the board reorganization and staff reduction were part of the company’s ongoing commitment to operational excellence.
Moro, a former Citi executive, said it was an honor to lead the company for almost a decade since he opened a Bitcoin trading desk in 2013.
Under Moro’s supervision, Genesis acquired Qu Capital, a quantitative trading firm, and Vo1t, a digital currency custodian. It also established a presence in London, New York, and Singapore.
Matrix of Genesis, DCG, Assumed Its Responsibilities
Genesis announced exposure to 3AC in July 2022 and sold the hedge fund guarantee after it failed to respond to a margin call. Genesis had required an average margin of more than 80% from the Singapore hedge fund which recently filed for bankruptcy and was ordered liquidated by a court in the British Virgin Islands.
Genesis’s parent company, Digital Currency Group, took over some of the lender’s responsibilities to allow it to continue operating.
Genesis lends to cryptocurrency firms looking to short digital assets or lock cryptocurrencies for yield.
Genesis joins Coinbase, Crypto.com, Bitpanda, and Blockchain.com, which have all made headcount reductions in response to declining user engagement and revenue.
Deribit, a company specializing in cryptocurrency derivatives, a product not currently offered by US-based exchanges, was among the creditors that backed the 3AC liquidation. Blockchain.com also weighed in.
By Audy Castaneda
