According to recent reports, Binance’s US branch subsidiary has laid off staff as it anticipates extensive legal proceedings in its case with the United States Securities and Exchange Commission (SEC). The exchange is expecting huge expenses in the ongoing case.
Sources reveal that Binance’s US branch has laid off about 50 employees across various departments like legal, compliance, and risk departments. In a LinkedIn post, two unidentified employees of Binance’s US branch disclosed about the “round of layoffs” and said that they are also the ones who are leaving the company.
However, Binance’s US branch has not yet officially announced or revealed about the staff cuts. The news come from reputed media handles who obtained the data from sources familiar with the matter.
Additionally, Binance global, which is a non-US entity had also cut the staff by over 20% in May. After which, Binance CCO Patrick Hillman said that those layoffs could be lesser than reported and as low as 5%. He added the actual number of layoffs would be unclear until a later audit.
Notably, the news of layoffs in Binance’s US branch comes shortly after the SEC filed charges against it. On June 5th, the SEC the SEC filed 13 charges against Binance’s US branch including unregistered offers and sales of the stablecoins – BNB and BUSD, its services namely the Simple Earn and BNB vault products, and its staking program. Additionally, the regulator claims in its suit that Binance failed to register its online platform as an exchange or a broker-dealer clearing agency.
It also stated that Binance’s “BAM Trading and BAM Management” defrauded equity, retail, and institutional investors about purported surveillance and controls over manipulative trading on the platform, which was in fact “virtually non-existent.” After this, the SEC filed an emergency motion to freeze the assets of Binance’s US branch
While the motion didn’t pass through and the US court advised the parties to come to a mutual settlement to avoid putting customers’ funds at threat, certain services of Binance’s US branch have been affected in the past days. Initially, the exchange delisted several trading pairs then it also ended up halting USD services and started working as a crypto only platform.
On one hand, the SEC received criticism for its enforcement oriented approach and being so hard on the exchange, but certain evidences started to put exchange’s image into question. The leaked chat between employees of Binance’s US branch where they mocked the platform’s compliance standards has been listed as an evidence from the SEC. To that, Changpeng Zhao (CZ), warned employees against engaging in such activities and suggested them to exit if intend to continue doing so.
As the case further unfolds, there would a whole lot of clarity on the stances of both the entities but it is very important for Binance’s US branch to save itself from any further defamation considering the underwhelming outflows and losses it has experienced in the past weeks. Besides SEC, the exchange is also dealing with a lawsuit from the Commodity Futures Trading Commission (CFTC) and an investigation from the US DoJ, in which some also anticipate another lawsuit.
