Major cryptocurrency exchange Binance reportedly cuts its workforce by at least 1,000 employees.
Binance, the cryptocurrency exchange giant, is facing a series of challenges, including layoffs, investigations, and allegations of securities violations.
Last month, the Securities and Exchange Commission (SEC) charged Binance, its CEO Changpeng Zhao, and Binance.US with 13 securities laws violations. The SEC alleged that Binance.com allowed high-value U.S. customers to continue trading, despite claims that U.S.-based customers were prohibited from transacting.
Binance.US's operations were controlled by Zhao, despite claims that it operated independently. This revelation comes as two executives at Binance, Steven Christie and Patrick Hillmann, have decided to leave the company. Christie cited family reasons, while Hillmann mentioned his wife's upcoming second child as his reason for departure.
The layoffs, part of a focus on "talent density" to ensure the company remains nimble and dynamic, are affecting at least 1,000 employees globally. Some of the affected employees were asked to sign termination agreements offering two months' salary in Binance's crypto token, BNB.
Binance is also facing an ongoing Justice Department probe, which may reshape the company fundamentally. This is the third concurrent investigation of the exchange by U.S. government agencies, joining the SEC and the Commodity Futures Trading Commission (CFTC). In March, the CFTC sued Binance and its CEO for operating an "intentionally opaque" enterprise in violation of the Commodity Exchange Act.
Despite the challenges, Binance celebrated its sixth anniversary of operations on Friday. The company has grown from 30 to almost 8,000 employees globally over the last 6 years. However, in a bid to cut costs, Binance has stopped offering certain benefits, including mobile-phone reimbursement, fitness reimbursement, and work-from-home expenses.
Zhao has not publicly specified the exact number of Binance employees that may be laid off in the next three to six months. He suggested there could be additional layoffs every three to six months. Binance is also reevaluating talent and expertise in critical roles, and will look at certain products, business units, staff benefits, and policies.
The Wall Street Journal reported that Christie praised the investment Binance has made in compliance, people, and technology. It remains to be seen how these challenges will impact Binance's future and its commitment to compliance and growth.
