Gemini, a company that acts as both an exchange and a custodian for digital assets, has announced (1) that it will lay off another 10% of its workforce. This will be the third wave of layoffs in the past eight months. Cameron and Tyler Winklevoss, the founders of Gemini, were quoted as saying that the decision to lay off staff was motivated by “turbulent market circumstances.”
In addition, Gemini has been under tremendous pressure due to the disagreement it has been having with Genesis Global on its joint Earn program.
Cameron Winklevoss, President of Gemini, made the following statement:
“It had been hoped that layoffs would end after the summer, but “continued unfavorable macroeconomic conditions and unparalleled fraud generated by criminal actors in our business have left us with no alternative but to modify our prognosis and further cut personnel.”
In June of 2022, Gemini carried out the initial wave of layoffs at the company. At that moment, the exchange had around 1,100 employees, meaning 10 percent of those jobs were eliminated.
After a few weeks had passed, Gemini announced yet another 7% cut to its workforce, blaming “turbulent market conditions.” As a direct consequence, Gemini’s overall headcount by the end of the preceding year was anywhere between 650 and 700 individuals.
Gemini sent the following notice to its staff members:
“We have spent a significant portion of the last six months working to future-proof Gemini by right-sizing our workforce and manager-to-builder ratio, decreasing our OpEx, and cultivating a culture that can accomplish more with fewer resources. It is time to look forward and redouble our commitment to constructing a future for ourselves.”
As a preventative precaution in response to the current state of the market, Gemini is not the only firm to have terminated employee employment. Coinbase, Amazon, Salesforce, Microsoft Corporation, Crypto.com, and Goldman Sachs Group Inc are just some firms that are going through a significant decrease in staff, but this list is far from complete.
The Gemini and Genesis Showdown
The failure of cryptocurrency lender Genesis Global Capital has become a tipping point for Gemini. In 2020, Genesis and Gemini agreed to allow Gemini customers, such as retail investors from the United States, to loan their cryptocurrency assets to Genesis in return for the promise of interest payments from Genesis. Both companies signed this agreement.
Further, in February 2021, Genesis and Gemini started offering the Gemini Earn program to individual investors. Under this program, participants tendered their crypto assets to Genesis, and Gemini acted as the agent to facilitate the transaction. Gemini Earn investors received a percentage of Genesis’s profits from selling their assets.
Up until November 2022, the corporations’ participation in the Earn program was proceeding swimmingly. But with the Collapse of FTX Derivatives Exchange, Genesis was forced to stop processing withdrawals, which meant that Earn clients could not withdraw their funds.
Customers of Gemini whose monies were locked away in the Earn program were negatively impacted when the exchange Gemini ceased withdrawals.
In addition, the US SEC brought charges against Gemini and Genesis Global Capital for allegedly selling and offering unregistered instruments for sale. After Genesis had sent some of the revenues from the loan back to Gemini, the latter had deducted an agent charge, as the explanation given by the agency indicated.
On January 19, Genesis submitted a petition for protection under the bankruptcy laws, alleging potential obligations to Earn customers of up to $10 billion. At the moment, Genesis is getting ready for the hearing that will be held on its bankruptcy.
