By
Steve Muchoki
April 19th, 2024
Gemini conducted the first round of layoffs back in June 2022. At that time, the exchange cut 10% of its workforce from around 1,100 employees. A few weeks later, Gemini reduced its staff by another 7%, citing “turbulent market conditions.”
Digital asset exchange and custodian Gemini will cut 10% of its staff, which is already the third round of layoffs in eight months. As reported by The Information, Gemini founders Cameron and Tyler Winklevoss cited “turbulent market conditions” as a reason behind the decision to lay off employees. Besides, Gemini has been facing a lot of pressure following its dispute with Genesis Global over their joint Earn program.
Gemini President Cameron Winklevoss stated:
“It was our hope to avoid further reductions after this summer, however, persistent negative macroeconomic conditions and unprecedented fraud perpetuated by bad actors in our industry have left us with no other choice but to revise our outlook and further reduce headcount.”
Gemini conducted the first round of layoffs back in June 2022. At that time, the exchange cut 10% of its workforce from around 1,100 employees. A few weeks later, Gemini reduced its staff by another 7%, citing “turbulent market conditions.” As a result, by the end of last year, Gemini’s headcount was totaling between 650 and 700 people.
In a message to its employees, Gemini said:
“We have spent a large part of the last six months future-proofing Gemini by right-sizing our headcount and manager-to-builder ratio, reducing our OpEx, and fostering a culture that does more with less. It’s now time to look ahead and redouble our focus on building the future.”
Gemini is not the only company to lay off employees as a protective measure in the current market conditions. Coinbase (NASDAQ: COIN), Amazon (NASDAQ: AMZN), Salesforce (NYSE: CRM), Microsoft Corp (NASDAQ: MSFT), Crypto.com, Goldman Sachs Group Inc (NYSE: GS) – this is not the full list of companies undergoing a massive decline in headcount.
Gemini and Genesis Dispute
For Gemini, the burning point has been the bankruptcy of crypto lender Genesis Global Capital. Back in 2020, Genesis and Gemini signed an agreement to offer Gemini customers, including retail investors in the US, an opportunity to loan their crypto assets to Genesis in exchange for Genesis’ promise to pay interest. Further, in February 2021, Genesis and Gemini began offering the Gemini Earn program to retail investors, whereby Gemini Earn investors tendered their crypto assets to Genesis, with Gemini acting as the agent to facilitate the transaction.
The companies were doing pretty well in the Earn program until November 2022. Unfortunately, the Earn customers could not gain access to their funds as Genesis closed withdrawals following the implosion of the FTX Derivatives Exchange. Gemini halted withdrawals, which affected Gemini’s customers whose funds were locked up in the Earn program. Further, the US Securities and Exchange Commission (SEC) charged Gemini and Genesis Global Capital with offering and selling unregistered securities. The agency explained that after Genesis sent a portion of the profits of the loan back to Gemini, the latter deducted an agent fee.
On January 19, Genesis filed for bankruptcy protection, citing liabilities of up to $10 billion to Earn customers. Currently, Genesis is preparing for the hearing for its bankruptcy.