Binance.US to slash headcount in wake of SEC lawsuit
Binance.US announced the layoffs in an email to employees
Shutterstock modified by Blockworks
Binance.US has already put in place layoffs in the wake of the SEC’s lawsuit against it, with the exchange on Thursday telling employees the regulator put it in an “unfortunate position.”
That position, according to an email sent from Binance US management reviewed by Blockworks, stemmed from a “cascading effect” from the SEC’s enforcement that has hindered Binance.US’ relationship with its banking partners.
The SEC earlier this month sued Binance, CEO Changpeng Zhao, BAM Management and BAM Trading — the companies that manage Binance.US. And the regulator has sought to impose a freeze on the exchange’s assets.
A spokesperson for Binance.US confirmed the layoffs to Blockworks without specifying how many employees were affected.
The decision to lay off employees came after Binance.US moved to become a crypto-only exchange. Last week, the company announced it would be “suspending USD deposits and notifying customers that our banking partners are preparing to pause fiat (USD) withdrawal channels as early as June 13.”
“The move to become a crypto-only exchange was not a decision but rather a circumstance driven by a politically motivated regulator,” the email said.
Binance US’ board put in place an initiative to “shrink the size of our teams across the company and reduce our burn rate” through the company’s “transition” to a crypto-only exchange, Binance said in the email.
“Unlike every other U.S. crypto company, we have been working to avoid this scenario, but circumstances have now shifted,” it said.
A timeline for the layoffs is unclear, though the email said “the next few days and weeks will be difficult as we work through these transitions.”
In May, prior to the legal battle that Binance and Binance.US now face, Binance said that it was reevaluating “talent density across the organization.”
Last week, the SEC filed for a temporary restraining order that would freeze BAM Management and BAM Trading — and therefore Binance.US —- assets. A judge asked the SEC and Binance to compromise on a deal to avoid a full freezing of assets.
The two parties have a Thursday deadline to submit a new proposal.
In a Wednesday filing, Binance.US submitted a list of expenses, as ordered by the Court, which included employee benefits, accounting, audit and employee expenses as well as bank reserves and legal fees.
In a lawsuit last week, the SEC claimed Binance, BAM Trading, BAM Management and Zhao violated the Exchange and Security Acts.
Don’t miss the next big story – join our free daily newsletter.