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Genesis might need to cut a lot more than 50 people

Genesis Trading, the crypto broker, is being hit hard by the FTX collapse. Having cut staff in the summer, it may soon need to again.

In a call with clients today, CEO Derar Islim said customer withdrawals had exceeded the firm’s liquidity profile and that redemptions were being suspended. Islim said the move concerns the lending business and won't impact Genesis' trading or custody services. 

The company said in a tweet last Thursday that it had $175m locked in FTX trading accounts, but said this wouldn't impact its market making activities. It said its financial relationship to FTX was “not material.”

It also stated in another tweet that it had lost approximately $7m in hedges and collateral related to several counterparties, including Alameda, the hedge fund operated by FTX employees.

The company cut 52 staff over the summer, CoinDesk reported, as a consequence of its association with Three Arrows Capital, the now defunct Singapore-based hedge fund. CoinDesk claimed Genesis to have 260 employees at the time.

Genesis has been expanding significantly. Its headcount increased by an estimated 53%, as reported by cryptotimes, during 2021.

Some of its new hires have deep roots in finance, with Goldman, Morgan Stanley, UBS, and Credit Suisse VPs and directors all joining the firm in the last two years.

The company’s CFO, Alice Chan, was a VP at both Goldman Sachs and JPMorgan in a variety of regulatory roles. She joined Genesis in 2021 as CFO from Cantor Fitzgerald, the investment bank, where was CFO.

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AUTHORZeno Toulon

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