Binance Allegedly Cuts Over 1,000 Jobs Amid SEC Lawsuit and Impending DOJ Inquiry
Binance, the world’s largest cryptocurrency exchange, has reportedly laid off over 1,000 employees amid a lawsuit from the Securities and Exchange Commission (SEC) and impending enforcement actions from the US Justice Department. The cuts have occurred over recent weeks and may reduce Binance’s staff of around 8,000 by one-third. Customer service employees have been disproportionately affected, and the layoffs have been distributed globally. While a company representative confirmed the layoffs, they did not specify the exact number. Binance had previously acknowledged a churn of employees in May before the SEC filed 13 charges against the company and its CEO in early June. However, the scale of the layoffs had not been previously reported.
Last Thursday, key executives resigned in response to Binance CEO Changpeng Zhao’s handling of the Justice Department’s investigation into the company. These departures included the general counsel, chief strategy officer, and SVP for compliance. Management at Binance reportedly asked US-based employees during midyear performance reviews if they would be willing to relocate to other countries. Those who declined were let go.
These latest developments come as Binance faces a flurry of litigation from US regulators. In March, the Commodities and Futures Trading Commission sued the company, alleging that it illegally courted US customers for its international branch. In June, the SEC followed suit and accused Binance and Zhao of engaging in deception, conflicts of interest, lack of disclosure, and evading the law. There have been rumors of an impending indictment against Binance and Zhao, along with reports of a long-running Justice Department investigation.
The layoffs and executive departures may lead to further chaos for Binance as it navigates the legal challenges from US regulators. The company maintains that the layoffs were a way to reevaluate whether they have the right talent, rather than a case of downsizing. However, the circumstances surrounding the departures and the ongoing investigations raise concerns about the future of the exchange.
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