Binance.US reportedly trims workforce amid regulatory woes
In the wake of recent allegations by regulators of securities law violations, Binance.US, the American branch of the global cryptocurrency titan, has initiated a round of staff cutbacks, say insiders and social media posts by employees.
Binance.US, the US counterpart of the global cryptocurrency powerhouse, has reportedly commenced a series of staff cutbacks following last week’s regulatory charges of securities law violations against the firm. According to anonymous sources and social media posts by employees cited by Reuters, the allegations triggered a request to freeze the firm’s assets.
According to one source, an estimated 50 employees have been laid off, although Reuters has not validated the total number of positions of those affected with Binance.
The layoff wave seems to have affected the legal, compliance, and risk departments within Binance.US, as reported by insiders who requested to remain unidentified.
Two Binance US employees announced their departure from the company on LinkedIn on June 14, with one citing a “round of layoffs.”
Previous Binance layoffs rumors
Rumors of potential layoffs had circulated in May, suggesting that Binance, which employs about 8,000 people globally, could shed about 20% of its staff in June.
However, CEO Changpeng Zhao dismissed these speculations, asserting that while the company does have a program for letting go of unsuitable employees, there is no fixed percentage of staff that Binance intends to release. Zhao also noted that the cryptocurrency exchange continues to hire more personnel.
Binance’s legal issues
On June 5, the SEC leveled charges against Binance and its CEO Changpeng Zhao, accusing them of devising Binance.US as part of a “deception network” to skirt securities regulations to safeguard US investors. Binance has pledged a vigorous defense against the allegations.
Additionally, the SEC has taken legal action against BAM Trading, the operating company for Binance.US, claiming it misled investors about its platform’s “non-existent trading” safeguards.
A day after the charges, the SEC approached a federal court with a request to freeze the assets of Binance.US, which includes over $2.2 billion in cryptocurrency and around $377 million in US dollar bank accounts. The SEC’s request stems from concerns that the exchange might transfer these funds overseas.
Binance US has dismissed the request as “unjustified” and described the SEC’s allegations as “unfounded.”