Binance.US Faces Challenges Following SEC Lawsuit
Binance.US, the American subsidiary of cryptocurrency exchange Binance, is encountering significant obstacles as a result of legal actions taken by the U.S. Securities and Exchange Commission (SEC). The company has been forced to lay off over 200 employees since June, which accounts for two-thirds of its workforce. Additionally, Binance.US has experienced a decline in revenue, with earnings dropping by approximately 75% after the SEC sought a restraining order to freeze Binance’s assets.
Forced Layoffs and Revenue Plunge
The SEC’s lawsuit against Binance alleges various forms of misconduct, including mishandling customer funds and offering registered securities. This legal action directly resulted in the downsizing of Binance.US and the subsequent termination of many employees.
Christopher Blodgett, the Chief Operating Officer of Binance.US, expressed his concern over the impact of the SEC’s actions. He stated that the trading platform’s revenues significantly declined following the regulatory body’s intervention.
Binance’s Legal Troubles
The lawsuit filed against Binance in June included 13 charges, accusing the exchange and its founder, Changpeng Zhao, of engaging in deceptive practices. The legal scrutiny extended to Binance.US as well, with allegations of collusion in wash trading to artificially inflate trading volumes.
Although Binance reached a settlement with several federal agencies worth $4.3 billion, including the Justice Department and the Commodity Futures Trading Commission, the SEC lawsuit remains ongoing. Binance has attempted to have the suit dismissed but was unsuccessful.
Challenges Faced by Binance.US
The SEC’s actions not only affected Binance but also had a significant impact on its U.S. subsidiary. The freezing of assets hindered Binance.US’s ability to establish crucial partnerships, including banking services and market makers.
As a result of the legal battle, Binance.US saw a drastic reduction in the number of partners it had. The platform went from having over 20 partners to less than five after the SEC’s restraining order was issued.
In an effort to provide users with alternative options to convert dollars into cryptocurrencies, Binance.US partnered with crypto startup MoonPay after losing banking partners. However, the decline in Binance.US’s operations coincided with market instability and decreased trading activity in the broader cryptocurrency market.
Past Layoffs and Ongoing Legal Proceedings
Binance.US had previously experienced layoffs in September, where 100 staff members were let go. Additionally, the company saw the departure of its CEO, Brian Shroder. Meanwhile, the legal proceedings continue, with a sentencing hearing for Changpeng Zhao related to the DOJ settlement scheduled for April.
Hot Take: Binance.US Struggles Amidst Legal Battles
The legal actions taken by the SEC against Binance have had severe consequences for its American subsidiary, Binance.US. The company has been forced to downsize its workforce significantly and has experienced a significant decline in revenue. The freezing of assets by the SEC has also made it challenging for Binance.US to secure essential partnerships.
These challenges have resulted in decreased trading activity and a decrease in prices within the cryptocurrency market. Binance.US has attempted to find alternative solutions, such as partnering with MoonPay, but the impact of the legal battles continues to hamper its operations.
As Binance and Binance.US navigate through ongoing legal proceedings, it remains uncertain how these challenges will ultimately impact their future in the cryptocurrency industry.
By
By
By
By
By