The largest cryptocurrency exchange, Binance, has laid off a significant portion of its workforce due to federal investigations by regulators in the US and abroad, which could drastically disrupt its business.
More than 1,000 people have been laid off in recent weeks, according to a source familiar with the situation. Even more employees were affected by the layoffs this week. According to former employees, employees in customer service were initially affected. According to the source, Binance could lose more than a third of its employees as a result of the ongoing reform.
Last week, the WSJ reported layoffs, including in the US, but the extent of the cuts was not known. A Binance spokesman confirmed the layoffs but declined to give the number. Before the layoffs, Binance had 8,000 employees.
“As we prepare for the next major growth cycle, it has become clear that to stay agile and dynamic, we need to focus on workforce density across the business. This isn’t about downsizing, it’s about reassessing whether we have the right talent and experience for critical positions.“, he said.
In recent months, the exchange has become a target of persecution by US regulators who are trying to seize control of the long-floating cryptocurrency industry. In June, the US Securities and Exchange Commission sued the company and its founder Changpeng Zhao. She alleges that the company conducted its activities in the country illegally and in particular misused customers’ funds. Binance denied these allegations. In a number of European countries, the exchange has also encountered difficulties in obtaining licenses for its activities.
However, the biggest concern for the stock market remains the US Department of Justice (DOJ) investigation. It was revealed last week that Binance executives were beginning to fear that the Justice Department would file charges against the company and Zhao himself. Zhao has refused to relinquish control of the company or resign, and many at the company believe his tenure could threaten Binance’s survival.
A number of high-profile employees have recently left the company, including the General Counsel, the Chief Strategy Officer and the Head of Investigations. Fearing the actions of the Justice Department, the exchange decided to liquidate its physical presence in the US.
Now Binance is going through a difficult time. The firing of a significant portion of the workforce, harassment from regulators, and possible indictments against company management make for an unpredictable future for this giant of the cryptocurrency world. It is necessary to closely monitor Binance’s actions and the response of regulators. The outcome of these events will determine not only the future fate of the company, but also possible changes in the field of cryptocurrencies in general.