Cryptocurrencies have rebounded some, but the industry’s tumble is still producing shock waves.
The latest casualty: Genesis Global Trading CEO Michael Moro, who’s stepping down from his position at the crypto trading and lending firm after it made $2.4 billion in loans to bankrupt hedge fund Three Arrows Capital, also called 3AC. Genesis said Moro would remain as an advisor.
In a separate statement, Genesis said it had reduced its headcount by 20%. “Amidst the current market drawdown, we are confident this transition will further fortify Genesis, enabling us to emerge from this period even stronger than before,” the statement said.
Though little-known outside crypto circles, Genesis is one of the industry’s most crucial institutional trading firms. Among other activities, the firm brokers and provides custody for cryptocurrencies and lends them out to funds betting that prices will rise or fall. The company most recently said it originated about $40.4 billion in new loans in the second quarter, down 9% from the first quarter.
Some crypto-yield firms that pay deposits to mom-and-pop investors on their digital-token deposits have sent tokens on to Genesis to be lent out to institutions.
The 3AC loans were made by Digital Currency Group, which owns Genesis, the defunct hedge fund’s single-largest creditor according to court documents filed last month. According to the filings, DCG is owed about $1.2 billion after considering collateral the hedge fund had posted.
A press release issued by Genesis said Chief Operating Officer Derar Islam would act as interim CEO while the firm searched for a permanent successor. The firm also noted a number of new leadership hires that it said were “focused on strengthening the company’s overall risk management.”
“It has been an honor to lead Genesis for nearly a decade and I look forward to supporting the company’s next phase of growth,” Moro said in the statement. Moro referred a request for further comment to the Genesis spokesman.
As a result of the 3AC losses, DCG assumed some of its subsidiary’s liabilities to ensure Genesis would have enough operating capital, Moro said last month.
What is Genesis Crypto?
A Genesis Block is the name given to the first block of a cryptocurrency, such as Bitcoin, ever mined. A blockchain consists of a series of so-called blocks that are used to store information related to transactions that occur on a blockchain network. Each of the blocks contains a unique header, and each such block is identified by its block header hash individually.
These blocks get layered—one on top of the other, with the Genesis Block being the foundation—and they grow in height until the end of the blockchain is reached and the sequence is complete. The layers and deep history of each sequence are one of the things that makes a blockchain-based cryptocurrency so secure.
Bitcoin’s Genesis Block was the first instance of a proof-of-work blockchain system and is the template for all other blocks in its blockchain. In 2009, Bitcoin’s pseudonymous developer, Satoshi Nakamoto, created the Genesis Block, which launched the cryptocurrency boom that is ongoing today.