Genesis CEO exits after crypto broker took hit from Three Arrows collapse

Crypto broker Genesis will cut a fifth of its staff and replace its chief executive as it counts the cost of lending $2.4bn to hedge fund Three Arrows Capital.

The departure of Michael Moro after six years is one of the most high- profile casualties so far from the collapse of Three Arrows, which has reverberated through the digital asset sector. Genesis will also cut around 20 per cent of its 260 employees, it said.

The US group was among the companies hardest hit by the failure of Three Arrows, the Singapore crypto hedge fund that filed for bankruptcy in July when its bets on bitcoin and other cryptocurrencies soured in the heavy sell-off of digital assets this year.

Many of the industry’s best-known names, including Voyager Digital, BlockFi and Deribit, were also forced to liquidate some of Three Arrows’s positions when the investment shop failed to meet margin calls. Court documents showed that Genesis had lent Three Arrows $2.4bn in undercollateralised loans.

Genesis’s parent company Digital Currency Group, founded by investor Barry Silbert, has taken over the trading firm’s liabilities related to Three Arrows and lodged a $1.2bn claim in the US bankruptcy case.

Moro said in July that Digital Currency Group had “assumed certain liabilities of Genesis related to [Three Arrows] to ensure we have the capital to operate and scale our business for the long term”.

Genesis said its new leadership would focus on “strengthening the company’s overall risk management”. It added that the changes would enable the company “to emerge from this period even stronger than before”.

Chief operating officer Derar Islim, who joined Genesis in 2020 after working for San Francisco venture capital firm Hard Yaka and Bank of America, will replace Moro on an interim basis. It has begun the search for a full-time successor.

Genesis also announced new appointments to senior positions in the firm’s governance, compliance and risk positions. Tom Conheeney, who was the president of Steven Cohen’s former hedge fund SAC Capital and its successor Point72 Asset Management, has been appointed as a senior adviser.

“It has been an honour to lead Genesis for nearly a decade and I look forward to supporting the company’s next phase of growth,” said Moro in a statement.

Other major companies, including Coinbase, Crypto.com and Gemini, have announced job cuts after being caught out by the sharp drop in cryptocurrency prices. Major crypto tokens plunged as much as 70 per cent from their peak last autumn, as investors spooked by tightening central bank policy dumped risky assets.

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