The US affiliate of Binance has laid off around 50 staff across a few divisions in the latest round of reducing its workforce, Reuters reported citing two anonymous sources.
A Massive Layoff Round at Binance.US
The report detailed that the laid-off staff were employed by Binance.US' legal, compliance, and risk departments. Binance.US did not confirm the layoffs officially, however, at least two employees of the US-based crypto exchange confirmed their exit on Wednesday on Linkedin.
Earlier, independent journalist Colin Wu revealed that Binance had laid off 20 percent of its employees from its total headcount of 8,000. However, Binance's Chief Strategy Officer, Patrick Hillmann, spun the layoff, calling it a "talent density audit and resource allocation exercise."
Regulatory Troubles
The latest layoffs came after the US Securities and Exchange Commission (SEC) brought a civil lawsuit against Binance, its two US affiliate firms, and the CEO, Changpeng Zhao. They are facing 13 charges for the offenses, including the operation of illegal trading platforms, offering unregistered crypto asset securities, and commingling customers' funds.
Additionally, the lawsuit alleged Zhao and Binance.com have tight control over BAM Trading, which operates Binance.US. Though Zhao did not hold any executive positions in the US affiliate, the staff of BAM Trading referred to his controls as "shackles" which prevented them from understanding and freely operating the US platform. A former CEO of BAM Trading even told Binance's CFO that her "entire team feels like [it had] been duped into being a puppet."
The lawsuit also specifically charged BAM Trading for misleading investors about "non-existent trading" controls over its platform.
Meanwhile, the SEC is now seeking to freeze the assets of Binance.US, which include more than $2.2 billion held in crypto and some $377 million in US dollar bank accounts, and has already filed a petition in the court. The SEC is concerned that the company might move these funds offshore, but Binance.US is saying that such an asset freeze would cripple its business.
This article was written by Arnab Shome at www.financemagnates.com.
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