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Binance.US Implements Workforce Reductions in Anticipation of Prolonged and Expensive Legal Proceedings with SEC: Report
In a communication to its staff, Binance indicated that it anticipates prolonged and costly legal battles with the US Securities and Exchange Commission (SEC) and requested that the management of Binance.US reduce its workforce across the division.
The decision regarding job reductions is expected to impact approximately 50 employees.
Job Reductions at Binance.US
A report from Bloomberg highlighted that several employees at Binance’s US subsidiary have been let go. While a representative from the firm confirmed the layoffs, the specific number of employees affected was not disclosed.
Nonetheless, a report from Reuters specified that around 50 staff members have been impacted.
Earlier this month, Binance.US announced that it was being severed from its banking and payment partners. On June 9, the cryptocurrency exchange catering exclusively to American clients halted USD deposits and urged users to withdraw their dollar deposits immediately, citing the SEC’s “extremely aggressive and intimidating tactics.”
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Recently, Binance CEO Changpeng Zhao refuted claims that the company sold BTC and BNB, labeling such social media speculation as FUD. CZ emphasized that the firm continues to hold its “bag of FTT.”
In Conflict with the SEC
In its lawsuit filed on June 5, the SEC sought a court order to freeze the assets and operations of Binance.US. However, the court rejected the SEC’s request on June 14 and instructed Binance.US and the agency to collaborate and seek a resolution.
“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 stated.
These events indicate that the recent tightening of US regulators’ approach following the collapse of FTX in November 2022 has finally impacted the leading players in the industry. The US SEC initiated lawsuits against Binance and Coinbase on June 5 and June 6, respectively.
The Commission’s allegations against both companies included operating as exchanges, broker-dealers, and clearing houses without the necessary licenses. It accused Binance of managing two unregistered securities – BNB and BUSD – and mixing customers’ funds. The SEC contended that Binance and Coinbase facilitate trading in crypto tokens, which are considered unregistered securities.
The regulator seeks for the exchanges and tokens to comply with the regulations that govern securities. This entails adhering to the rulebook and providing adequate disclosures that assist investors in mitigating risks and making informed choices.
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