Binance, the prominent cryptocurrency exchange, is reducing a significant portion of its workforce in response to increased regulatory scrutiny in the United States. According to a knowledgeable source, over 1,000 employees have been dismissed in recent weeks, with the ongoing process potentially resulting in Binance losing more than one-third of its staff. Former employees have revealed that further job cuts occurred this week, particularly affecting customer service personnel. These layoffs were not limited to a specific region and included approximately 30 customer service employees in India.
While reports of layoffs and resignations at Binance, including in the U.S., had previously surfaced, the extent of the downsizing was unclear. A Binance spokesperson acknowledged the staff reductions but declined to disclose the exact number of employees affected. The spokesperson stated that the company aims to enhance its agility and dynamism by evaluating the talent and expertise in critical roles, rather than merely adjusting the workforce size. Prior to the layoffs, Binance had a global staff of 8,000.
Binance has faced increased scrutiny from U.S. regulators in recent months as they seek to regulate a previously unregulated industry. In June, the Securities and Exchange Commission (SEC) filed a lawsuit against Binance and its founder, Changpeng Zhao, alleging illegal operations in the U.S. and misuse of customer funds, among other violations. Binance has denied these allegations. The exchange has also encountered obstacles in Europe while attempting to obtain operating licenses.
However, the most significant challenge for Binance is an ongoing investigation by the U.S. Department of Justice (DOJ). The fear of potential charges being filed against the company and Zhao has reportedly led to concerns among Binance executives. Zhao has resisted relinquishing control or stepping down, raising doubts about Binance's future survival, as per internal sources. Several high-profile employees, including the general counsel, chief strategy officer, and head of investigations, have recently departed from the company.
Amid apprehensions regarding potential actions by the DOJ, Binance has decided to eliminate its physical presence in the United States, resulting in the relocation or layoff of approximately 150 individuals. Binance.US, a separate exchange operated by Binance in the U.S., faces its own set of challenges. Following the SEC lawsuit, its market share has significantly declined.
On its six-year anniversary, Binance expressed optimism for the future in a tweet message.
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