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Binance.US CEO Brian Shroder left the company as it slashed a third of its workforce amid a regulatory storm that’s shrunk its business.
More than 100 staff are leaving the company, adding to cuts in June, as it converts into a crypto-only exchange. It immediately blamed the Securities and Exchange Commission’s regulatory crackdown for its plight.
“The SEC’s aggressive attempts to cripple our industry and the resulting impacts on our business have real world consequences for American jobs and innovation, and this is an unfortunate example of that,” it said in a statement. But it added that its actions would provide Binance.US exchange with ”more than seven years of financial runway and enable us to continue to serve our customers while we operate as a crypto-only exchange.”
Parent Binance, the world’s biggest cryptocurrency exchange, has faced an almost perfect storm in the US this year. The SEC filed a lawsuit against it in June, alleging that it violated securities laws, while in March the US Commodity Futures Trading Commission charged Binance and CEO Changpeng Zhao with ”willful evasion of federal law.”
Binance Revenues Collapse
Revenues at Binance.US have collapsed to $70 million this month from $10.6 billion in January, The Block reported.
The US staff cuts and Shroder’s departure come as an exodus of staff globally from the firm gathers pace. Eleven top staff have left since July with four of them exiting last week. Fortune reported that the exodus was sparked in part by disquiet within the company about the way Zhao has handled an investigation into the exchange by the US Department of Justice.
Zhao has hit back at reports about staff departures, rumours about plans for market withdrawals and some product closures, dismissing ”negative” reports as ”FUD.”
Saw some debates in the community. When you do the right thing, and there is FUD, you don't have to do anything. The community defends you.
Let me summarize. There have been a lot of negative news/rumors, bank runs, lawsuits, closing of fiat channels, product wind downs,…
— CZ 🔶 BNB (@cz_binance) September 7, 2023
And the company has dismissed parallels between itself and bankrupt crypto exchange FTX, stating that all its asset are “backed one-to-one” and providing assurances that it has no liquidity issues.
Despite facing lawsuits, heightened regulatory scrutiny and challenges in some regions, Binance remains financially stable and is not comparable to the now-bankrupt FTX head of regional markets Richard Teng told CoinTelegraph in an interview.
“There were different rumours and FUD after FTX,” he said. “People tried to associate us, which is totally untrue. Our assets are backed one-to-one.”
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