NEW YORK (BLOOMBERG) – Genesis chief executive officer Michael Moro is stepping down as part of a leadership shuffle after the crypto brokerage was stung by exposure to bankrupt Singapore-based hedge fund Three Arrows Capital and a broad market downturn.
The New York-based company also said it is eliminating 20 per cent of its 260-person workforce to reduce costs, starting on Wednesday (Aug 17).
Chief operating officer Derar Islim will take over as interim CEO during a search for a permanent replacement, Genesis said in a statement. Mr Moro will advise the firm through the transition.
“The changes and investments we’re announcing today affirm our commitment to operational excellence as we continue to expand our services to meet the needs of our clients today and into the future,” Mr Islim in the statement.
A unit of crypto conglomerate Digital Currency Group, Genesis was the biggest creditor ensnared in the collapse of Three Arrows after the crypto hedge fund failed to meet margin calls. Its parent assumed some liabilities and filed a US$1.2 billion (S$1.66 billion) claim against Three Arrows, which is under liquidation.
Genesis is one of the largest and best-known lenders in digital assets. The company said last week that second-quarter new-loan origination had declined 9 per cent from the previous period to about US$40 billion. Crypto’s market value has plunged 50 per cent this year to about US$1.1 trillion, according to CoinMarketCap.
“Since we launched the first OTC Bitcoin trading desk in 2013, sophisticated investors have come to Genesis to provide liquidity, lending, and custody services for their digital assets,” Mr Moro said in the statement. “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.”