Binance.US Downsizing and Suffering Revenue Losses Amid SEC Lawsuit: Report
Binance’s US arm, Binance.US, is facing significant challenges as it downsizes its workforce and experiences a decline in revenue due to an ongoing lawsuit with the U.S. Securities and Exchange Commission (SEC). The SEC filed charges against Binance and its founder, Changpeng Zhao, in June, accusing them of various violations including selling unregistered securities, misleading investors, and mishandling customer funds. Binance.US is also accused of colluding with its parent company to artificially inflate trading volume.
Layoffs and Revenue Decline
Binance.US COO Christopher Blodgett revealed in a deposition that the lawsuit has forced the US platform to lay off more than 200 employees, which amounts to about two-thirds of its workforce. Additionally, Binance.US has seen a drastic decline in revenue, dropping by approximately 75% after the SEC motioned for a restraining order to freeze the company’s assets. Although the request was denied by the judge, the lawsuit still had a significant impact on the exchange’s earnings.
- The lawsuit resulted in Binance.US laying off more than 200 employees.
- Revenue fell by around 75% after the SEC filed a motion for a restraining order.
Impaired Partnerships
Blodgett stated that the lawsuit and restraining order had severe consequences for Binance.US, impairing its ability to form partnerships with banks and market makers. Following the charges filed by the SEC, the number of Binance.US partners decreased from over 20 to less than five. This legal action occurred during a bear market period, which also witnessed the collapse of other major industry players such as FTX exchange.
- Binance.US struggled to find partners such as banks and market makers due to the lawsuit.
- The number of Binance.US partners decreased from over 20 to less than five after the SEC charges were filed.
Hot Take: Impact on Trading Volumes and Business
The SEC lawsuit and restraining order had a detrimental effect on Binance.US’s trading volumes and overall business. Blodgett described the situation as an implosion, highlighting the significant challenges faced by the exchange. The legal action coincided with a bear market, compounding the difficulties experienced by Binance.US and other major industry players.
- Binance.US’s trading volumes and business suffered a severe blow due to the SEC lawsuit.
- The legal action occurred during a bear market, exacerbating the challenges faced by Binance.US and other industry players.
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