Binance has been in the news over the weekend over reported sizable layoffs at the crypto firm. A report by The Wall Street Journal claimed that over 1,000 staff members were given internal terminations at Binance in recent weeks. The exchange’s ongoing legal troubles with the SEC was quoted as the reason for triggering internal upheaval in the company. Changpeng Zhao, the CEO of Binance, has issued clarifications around these alleged internal job terminations over the weekend, but the news remains grim.
The costly court runs and legal liabilities in its tussle with the SEC have reportedly led Binance to resort to some aggressive cost cutting measures. According to WSJ’s report, Binance laid off over 1,000 employees in recent weeks. The report also claims that the firing exercise is ongoing and could lead to Binance letting go over a third of its staff.
While Zhao has accepted that there indeed have been internal terminations at the company, he also noted that Binance is working to ‘increase the talent density’ and that the firm is also hiring.
“The numbers reported by media are all way off. 4 FUD,” he tweeted.
As we continuously strive to increase talent density, there are involuntary terminations. This happens in every company. The numbers reported by media are all way off. 4 FUD.
On the bright side, they just can’t resist talking about us.
We are still hiring. :handshake:
— CZ :large_orange_diamond: Binance (@cz_binance) July 14, 2023
More staff terminations could be on the cards for Binance in the coming weeks.
“This is not a case of rightsizing, but rather, re-evaluating whether we have the right talent and expertise in critical roles as we prepare for the next major bull cycle,” a CryptoPotato report quoted a Binance spokesperson as saying.
CNBC estimates the number of layoffs at Binance to reach 3,000.
The SEC, on June 5, sued Binance and Zhao, alleging that the exchange artificially inflated its trading volumes, diverted customer funds, and failed to restrict US customers from its platform. The SEC alleged that Binance could have misled investors about its market surveillance controls.
In the latest development to this case, Binance entered into an agreement with the SEC to ensure that the US customer assets remain in the US until a sweeping lawsuit filed this month by the regulatory agency is resolved.
The agreement, disclosed in court papers, still require the approval of the federal judge overseeing the litigation.
In the due course of this legal battle, Binance may lose more funds in the coming times.
The customer support team of the exchange remains most threatened.
On July 14, Binance turned six. At the time in 2017, the exchange was launched with $15 million (roughly Rs. 123 crore) worth of digital assets as a crypto-to-crypto exchange with five tokens and two languages.
Today, Binance is touted as the largest crypto exchange in the world with a market cap of $3.97 billion (roughly Rs. 32,606 crore).