Crypto exchange Gemini is cutting 10% of its workforce, The Information reported on Monday, citing an internal message. Gemini, co-founded by twin brothers Cameron and Tyler Winklevoss, is subject to New York banking regulations. The two attributed the layoffs to volatile market conditions that are likely to continue for some time. The layoffs are Gemini’s third since last June.
As of November 2022, Gemini had 1,000 employees, according to PitchBook. However, this would mean a loss of position for about 100 people.
The latest cuts come as Gemini is under pressure from a high-profile dispute involving crypto lender Genesis over a joint Trust Earn Program. The SEC has complained against Genesis Global and Gemini Earn program over unregistered crypto assets sales.
Gemini officials did not reply to requests for confirmation on the latest round of cuts. On Monday, The Information reported about the layoffs.
The president and co-founder of Gemini, Cameron Winklevoss, stated in an internal message:
“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.”
The New York-based firm cut 10% of its staff in June 2022 following the collapse of hedge fund Three Arrows Capital (3AC) and Terra stablecoin ecosystem. In July, Gemini laid off another 7% of its workforce.
Genesis’ Bankruptcy Led To Gemini Crisis
Gemini’s splits correspond to significant operations across the industry, including Genesis itself, Blockchain.com, Crypto.com, Coinbase Global Inc., and others. They collectively eliminated hundreds of jobs alone in the first few weeks of 2023.
The cryptocurrency firm’s latest layoffs come days after the U.S. Securities and Exchange Commission (SEC) accused it of offering and selling unregistered securities to retail investors. Crypto lender company, Genesis Global Capital, has also been charged by the SEC in connection with the dispute.
In 2020, the two companies jointly launched a lending program called Gemini Earn which is now the focus of the SEC. Whereby Gemini Earn investors lent their crypto assets to Genesis to earn interest.
Relations deteriorated when FTX filed for bankruptcy in November 2022. Soon after, Genesis suspended customer redemptions, leaving Gemini clients short an estimated $900 million.
Around 340,000 Gemini and Earn users grew frustrated due to the blockage of Earn products, and some groups filed a class action lawsuit against the exchange.
On Jan. 19, Genesis filed for Chapter 11 bankruptcy protection in Manhattan federal court. According to SEC, Genesis and Gemini have raised billions of dollars in digital assets from hundreds of thousands of investors.
According to last week’s bankruptcy filing, Genesis owes $765.9 million to Gemini. In a list of the 50 largest unsecured creditors on file, Gemini tops the list.
The SEC argued that the program involved the offering and sale of securities and must be registered with the agency. In addition, authorities are investigating whether there were violations of other security laws.
In early January, Coinbase cut 20% of its workforce to preserve cash in the wake of the crypto market crisis.