Key Takeaways:
- Derar Islim, the chief operating officer of GENESIS Trading, was appointed as the crypto broker’s interim leader.
- According to the platform, it had 20% fewer employees.
- Islim will take over as CEO from Michael Moro, who will step down.
Genesis Global Trading is cutting off 20% of its 260-person workforce, just weeks after it was disclosed in court filings that the crypto brokerage firm lent $2.4 billion to the now-dissolved crypto hedge fund Three Arrows Capital Ltd.
Islim will take over for Michael Moro, who will stand down as CEO on Wednesday, according to the business. In July, Genesis, which is controlled by Digital Currency Group (DCG), the parent organization of CoinDesk, filed a $1.2 billion claim against collapsed crypto hedge fund Three Arrows Capital.
The failure of Three Arrows, which put up 50% collateral on its $2.4 billion loan and is a completely owned subsidiary of crypto giant Digital Currency Group, significantly impacted Genesis. After selling the collateral, DCG is still Three Arrows’ largest creditor and has a $1.2 billion claim against the hedge fund.
Several layoffs, bad debt, and bankruptcy filings occurred across the industry as a result of the failure of LUNA, the Terra ecosystem, Celsius Network, Three Arrows Capital, and a number of other companies.
However, the company had reduced its losses after Three Arrows failed to pay a margin call, according to departing CEO Moro at the time, who added that Genesis’s parent company Digital Currency Group had taken on some of the obligations of the cryptocurrency broker.
Mr. Moro has served as CEO since the beginning of 2016. From over-the-counter trading to institutional borrowing, lending, derivatives, custody, and prime brokerage, he assisted in expanding the firm’s service offerings. Genesis recently reported a 9% decrease from the prior quarter in the number of new loans it originated, totaling $40.4 billion. At the end of June, the company reported having an outstanding $4.9 billion in active loans, down from $14.6 billion in the first quarter.
Islim stated in a statement that “the adjustments and investments we’re announcing today underscore our commitment to operational excellence as we continue to grow our offerings to fulfil the demands of our clients now and in the future.”
Governance and risk duties are also being changed in the leadership structure. Michael Patterson replaced Daniel Ferguson as Genesis’ new chief compliance officer.
