Citing people familiar with the knowledge of the dismissals and employees’ social media posts, the U.S. partner of crypto giant Binance has carried out a round of layoffs since watchdogs charged it with violating securities laws and threatened to freeze its assets last week. A source mentioned that approximately 50 employees were slacked off. However, it has not yet been independently verified about the number of employees affected. The US spokesperson of Binance did not response on the matter.
On June 5, 2023, the SEC accused by Binance and its founder and CEO Changpeng Zhao for creating the US wing of the crypto giant as part of “web deception” to exploit securities laws which is aimed at protecting US investors. The company said that it would defend itself “vigourously”.
The SEC also sued Binance U.S.’ company BAM Trading, accusing that it misled investors about “non-existent trading“ regulations over its platform. A day after, the SEC asked a federal court to freeze the crypto company’s assets – which include more than $2.2 billion held in crypto as well as around $377 million in US dollar bank accounts. The commission also expressed its concern that the exchange could move those funds out of the country.
Finance US called the request “unwarranted” and claimed the SEC’s accusations were unjustified. Binance US CEO Brian Shroder wrote to employees, “Because of a preparation for a prolonged and very costly, the board asked management to right size organisation and reduce or burn rate to ensure long-term viability.”
On Wednesday on LinkedIn, two Binance US employees confirmed that they were leaving the company, with one mentioning a “round of layoffs“. In a tweet from June 9, Binance US and its banking partners mentioned that they were preparing to stop dollar withdrawals as early as June 13 after the SEC‘s “increasingly aggressive tactics”. Until then, the exchange has given customers the time to withdraw their funds, saying that they only want to become an exclusive crypto exchange.
Until now, the crypto giant had avoided layoffs. Over the past year. In the message, CEO Shroder said, “However, the SEC and the response by our banking partners has now forced us to change our approach.”
On Monday, in a court filing, Binance US operator, BAM trading, Mentioned that the SEC’s asset freeze threat would “effectively put BAM out of business.”
It wrote, “without the ability to pay its employees, Wenders, suppliers, and professionals in the ordinary course of business and to maintain its technology platform, operations would quickly grind to a halt.”
On June 6, the US securities and exchange commission asked a federal court to issue a temporary restraining order to freeze the assets of US wing of Binance. In its filing to the US District Court for the District of Columbia, the commission accused the exchange of deceiving, putting severe pressure on the world’s largest crypto currency exchange. The commission also charged by Nannes of years of violation – “disregard“ for US laws and “evasion of regulatory oversight“. The holding company of Binance is situated in the Cayman Islands.
The SEC also charged the company for artificially inflating its trading volumes and diverting customer funds as well as failing to restrict US customers from its platform and misleading investors. The exchange is also facing other legal issues and actions by the commodity futures trading commission CFTC and the Justice Department.