US Authorities Investigating Barry Silbert’s Crypto Empire Amid Layoffs

Bulletpoints:
• U.S. authorities are investigating transfers between Digital Currency Group and its subsidiary Genesis, a digital currency trading platform and liquidity provider.
• The investigation is regarding the financial operations of Barry Silbert’s crypto enterprise.
• Genesis had to cut down its staff size by 30%, after facing financial issues due to the bankruptcy of its two biggest borrowers.

U.S. authorities are currently investigating potential financial irregularities involving transfers between Digital Currency Group Inc. (DCG) and its subsidiary Genesis. Genesis is a digital currency trading platform and liquidity provider that is owned and operated by Digital Currency Group, a venture capital firm that invests in and incubates companies in the digital currency and blockchain technology space.

At the end of the third quarter, Genesis had around $3 billion in total active loans. However, the crypto lending business suffered a significant setback when FTX declared bankruptcy, causing extreme market turmoil. As a result, Genesis stopped making new loans and restricted customers from withdrawing funds. The company’s close affiliation to troubled crypto firms such as Three Arrows Capital, a Singapore-based cryptocurrency hedge fund, and Alameda Research, a trading firm closely associated with FTX, both of which are currently undergoing bankruptcy, were the source of its contagion concerns.

To deal with the financial issues caused by the bankruptcy of its two biggest borrowers, Genesis had to cut its staff size from 260 to 145 employees. This constituted a 30% reduction in the workforce, with the first round of layoffs seeing a 20% cut.

The US authorities’ investigation into the internal financial operations of Barry Silbert’s crypto enterprise is ongoing, and it remains to be seen what the outcome of the inquiry will be. In the meantime, Genesis continues to provide digital asset services to its customers, albeit with a reduced staff.

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