Crypto giant Binance's US affiliate fires staff after SEC charges
Business
Employees in Binance.US' legal, compliance and risk departments were among those dismissed
LONDON (Reuters) - The U.S. affiliate of crypto giant Binance has carried out a round of layoffs since regulators last week charged it with violating securities laws and sought to freeze its assets, said two people with knowledge of the dismissals and employees' social media posts.
One of the sources said around 50 people were laid off. Reuters was unable to independently verify the number or seniority of employees affected.
A Binance.US spokesperson did not respond to emails and calls seeking comment.
Employees in Binance.US' legal, compliance and risk departments were among those dismissed, the people told Reuters, requesting anonymity because the matter is private.
The SEC on June 5 accused Binance and its founder and CEO Changpeng Zhao of creating Binance.US as part of a "web of deception" to evade securities laws aimed at protecting U.S. investors. Binance said it would defend itself "vigorously."
The SEC also sued Binance.US' operating company, BAM Trading, alleging that it misled investors about "non-existent trading" controls over its platform.
A day later, the SEC asked a federal court to freeze Binance.US' assets, including more than $2.2 billion held in crypto and some $377 million in U.S. dollar bank accounts. The SEC expressed concern that the exchange could move those funds offshore.
Binance.US called the request "unwarranted" and said the SEC's allegations were "unjustified."
"Because of our preparation for a prolonged and very costly legal battle, the Board asked Management to right-size our organization and reduce our burn rate to ensure long-term viability," Binance.US CEO Brian Shroder wrote to employees in a message seen by Reuters.
'ROUND OF LAYOFFS'
Two Binance.US employees said on LinkedIn on Wednesday they were leaving the company, with one citing a "round of layoffs."
In a June 9 tweet, Binance.US its banking partners were preparing to stop dollar withdrawals as early as June 13 after the SEC's "increasingly aggressive tactics." It gave customers until then to withdraw their funds, saying it planned to become a "crypto-only exchange."
Binance.US had avoided layoffs over the past year, Shroder wrote in the message. "However, the SEC and the response by our banking partners has now forced us to change our approach."
In a court filing on Monday, Binance.US' operator, BAM Trading, said the SEC's asset freeze request would "effectively put BAM out of business."
"Without the ability to pay its employees, vendors, suppliers, and professionals in the ordinary course of business and to maintain its technology platform, operations would quickly grind to a halt," it wrote.
