Embattled crypto lending firm Genesis is reportedly considering filing for bankruptcy. It is also stated that Genesis has laid off 30 percent of its employees. On the other hand, there are speculations on Twitter that the crypto exchange Huobi has also laid off staff and closed internal communications. Here are the latest rumors about two big crypto companies…
Cryptocurrency trading platform Genesis lays off 30 percent of its employees
Genesis is considering filing for bankruptcy and has laid off about 30 percent of its employees, according to information the WSJ received on January 5 from “people familiar with the matter.” The layoffs occurred in several departments that left the firm with the remaining 145 employees. The report said Genesis reached out to investment bank and financial advisory firm Moelis & Co. to evaluate its options for the future. It was added that one of the company’s options was a potential Chapter 11 application. A spokesperson for the company told the WSJ:
As it continues to face unprecedented industry challenges, Genesis has made the difficult decision to cut staff. These measures are part of our ongoing efforts to move our business forward.
Genesis issues deepen
cryptocoin.com As we reported, Genesis has been in the limelight this week amid tensions between Gemini and the Digital Currency Group. Gemini lent money to Genesis and now wants them back. Genesis, on the other hand, stopped withdrawals in mid-November following the collapse of FTX due to too much exposure to Alameda. It also lent $2.4 billion to the now-bankrupt Three Arrows Capital (3AC) hedge fund.
Genesis has also discontinued credit creation and redemption. As a result, Gemini’s yield partner had $900 million in client funds locked in Genesis. In November, Genesis tried to raise $1 billion in bailout funds and said it would go bankrupt if it failed to do so. Judging by the latest developments, this possibility is now closer to reality. Interim CEO Derar Islam stated that the company “needs more time to resolve the growing financial crisis in the lending business.”
What’s going on in Huobi?
On the other hand, some rumors about Huobi, one of the major cryptocurrency exchanges, worried investors. Speculation on Twitter that crypto exchange Huobi is laying off staff has prompted the community to advise users to withdraw funds, although the exchange’s advisor denied the rumors. Huobi advisor Justin Sun, in a tweet on Jan. 5, citing the so-called bankruptcy rumors, saying that the exchange’s business development is “good” and that “the security of user assets will always be fully protected.”
Sun also debunked speculation about disgruntled staff, saying Huobi would “fully respect the legal demands of local employees.” Earlier, on Jan. 3, crypto reporter Colin Wu reported that Sun is converting Huobi employees’ salaries to Tether or USDC instead of paying them in local currency. Wu claimed that personnel who did not participate in the change could be fired. Citing people working at the exchange, Wu reported in December that Huobi had canceled its year-end bonuses and was preparing to lay off half of its 1,200 employees.
Justin Sun's HR is communicating with all Huobi employees to change the salary form from fiat currency to USDT/USDC; employees who cannot accept it may be dismissed. The move sparked protests from some employees. Exclusive https://t.co/QB4sjDyHc7
— Wu Blockchain (@WuBlockchain) January 4, 2023
According to Wu, the move to switch paychecks from fiat to stablecoins has prompted some employees to protest. A tweet from the BitRun Twitter account on January 4 claimed that the exchange’s “internal employee communication group” was closed and that “all communication and feedback channels with employees” were blocked. BitRun claimed that the app is “not protected by local law.” Huobi is headquartered in Seychelles and has offices in Hong Kong, the United States, Japan and South Korea. It is a public company on the Hong Kong Stock Exchange.
