Binance.US Resorts to Job Cuts as It Prepares for Long and Costly Litigation With SEC: Report

In a letter to employees, Binance said it foresees protracted and expensive litigation with the US Securities and Exchange Commission (SEC) and asked Binance.US management to reduce the size of its workforce across the division.

The job-cut decision is likely to affect about 50 employees.

Job Cuts at Binance.US

A Bloomberg report noted that a number of employees at Binance’s US affiliate have been laid off. While a firm spokesperson confirmed the lay-offs, the exact number of employees affected by the decision was not mentioned.

However, a Reuters report outlined that about 50 staff members have been affected.

Early this month, Binance.US said it was being cut off from the banking and payments partners. On June 9, the crypto exchange serving only American customers suspended USD deposits and asked users to withdraw their dollar deposits right away, given the SEC’s “extremely aggressive and intimidating tactics.”

More recently, Binance CEO Changpeng Zhao dismissed the notion that the company sold BTC and BNB and termed such rumors on social media as FUD. CZ asserted that the firm even holds its “bag of FTT.”

In a Crosshair With the SEC

In its June 5 lawsuit, the SEC requested the court to freeze the assets and operations of Binance.US. However, the authorities denied the SEC’s motion on June 14 and asked Binance.US and the agency to engage with each other and find a solution.

“Shutting it down completely would create significant consequences not only for the company but for the digital asset markets in general. (Work it out) – The nitty-gritty of it is better handled by you than by me,” the court said.

These developments signify that the sudden hardening of US regulators’ stance following the collapse of FTX in November 2022 has finally caught up with the industry’s top players. The US SEC filed lawsuits against Binance and Coinbase on June 5 and June 6, respectively.

The Commission’s charges against the duo included functioning as exchanges, broker-dealers, and clearing houses without proper licenses. It charged Binance with running two unregistered securities – BNB and BUSD – and commingling customers’ funds. The SEC argued that Binance and Coinbase allow trading in crypto tokens, which are unregistered securities.

The regulator wants the exchanges and tokens to abide by the guidelines that apply to securities. It means following the rulebook and making sufficient disclosure that help investors mitigate risks and make informed decisions.