There is another incident that has shaken the crypto market: Binance.US layoffs. Reuters reports that the exchange is cutting costs as it is preparing for expensive litigation with the United States Securities and Exchange Commission (SEC).
Binance.US Layoffs Ahead of Huge SEC Battle
The Binance.US layoffs follow the SEC lawsuit that was filed last week, which alleged that the exchange violated securities laws. Two individuals with knowledge of the matter confided in Reuters. No official statement has been made.
Those affected by the layoffs include employees in the legal, compliance, and risk departments. Bloomberg also stated the board had asked the company to shrink the size of its teams in “preparation for a multi-year and very costly litigation process.”
Binance CEO Previously Denied Rumors of Layoff
Binance CEO Changpeng Zhao had previously denied rumors of a mass layoff at Binance. There were reports in media outlets that 20% of the workforce would be let go due to poor market conditions. He called the reports FUD and said that the company has a “bottom-out policy.”
It’s clear that Binance is facing a tough time, with the exchange having to take a lot of action to prevent the SEC’s lawsuit from affecting its operations. The U.S. arm of the exchange has also had to turn into a crypto-only platform as banking and payment partners stopped supporting the exchange.
Binance.US Caught in Tough Battle
The Binance.US and SEC battle is heating up. The latter had requested the presiding judge to freeze the assets of the exchange, which would bring Binance some relief. Instead, Judge Amy Berman Jackson said that the two parties should come to an agreement related to limits.
The negotiations between Binance.US and the SEC started on June 14, but it’s unclear whether they will come to an agreement, or at least one, any time soon. The judge also displayed reservation regarding the requirement about setting up another hearing in two weeks’ time, as there were thousands of pages of documents to go through.
In addition to the Binance.US layoffs, the exchange has had to deal with a massive increase in outflow. The exchange’s market depth dropped by a whopping 76% following news of the SEC lawsuit.