Crypto exchange Binance is reportedly planning to lay off a significant number of employees in response to an ongoing probe by the United States Department of Justice (DOJ). The investigation is expected to conclude with a consent decree or settlement, according to an anonymous insider familiar with the company’s plans.
The job cuts are set to affect between 1,500 and 3,000 employees worldwide, with the process scheduled to take place throughout the remainder of the year. The Wall Street Journal had previously reported that 1,000 employees had already been let go, which forms part of the overall planned reductions. The source, who requested anonymity due to internal confidentiality, provided this information to CNBC.
The employee believes that the DOJ investigation will have a substantial impact on the future of Binance. If the company chooses to settle the allegations put forth by the DOJ, it could potentially result in a multi-billion dollar payment. Reports from Reuters suggest that federal prosecutors have been considering charges related to anti-money laundering violations and sanctions evasion. These allegations could potentially hinder Binance and its founder Changpeng Zhao from obtaining licenses necessary to continue operating.
However, a Binance spokesperson refuted claims that the layoffs would affect up to 3,000 employees, stating that the higher number was inaccurate. The spokesperson explained that the restructuring was aimed at optimizing talent density across the organization, ensuring agility and flexibility rather than downsizing. They emphasized the need to reassess the talent and expertise present in critical roles as the crypto exchange prepares for the next major bull cycle.
In recent months, Binance has faced significant regulatory challenges, including lawsuits from the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). These legal actions allege mishandling of customer assets and the operation of an illegal, unregistered exchange in the United States. Despite being personally named in the SEC’s lawsuit, Binance founder Changpeng Zhao has consistently dismissed concerns regarding the future of the exchange. However, the company has experienced substantial outflows from the exchange, amounting to hundreds of millions, since the initiation of the lawsuits. Furthermore, Binance has witnessed the departure of several key executives.
As Binance navigates the ongoing DOJ investigation and legal battles with U.S. regulators, the company is taking steps to restructure its workforce. While the exact number of affected employees remains disputed, the aim is to optimize talent and expertise within the organization. The outcome of the DOJ probe, whether through a consent decree or settlement, is expected to significantly reshape the future of Binance.
Leave a Reply