A recent update by Binance revealed that thousands of employees will leave the firm as regulatory pressure on the crypto exchange continues to mount. The Binance team had earlier announced plans to reevaluate the existing workforce. News concerning Binance restructuring efforts sparked mixed thoughts among the community.
In light of the Binance announcement, the crypto exchange confirmed that it would seek to fill vacant positions in the coming days. The community has expressed concerns about the number of employees leaving Binance since the previous lay off hundreds of employees were dismissed.
Binance to Lay Off Staffs
In its July 14 report, the Binance team withheld information concerning the number of employees affected by the axing. However, some media sites seemed more informed on the Binance layoff.
On Friday, July 14, the Wall Street Journal (WSJ) announced that Binance would be sending home around 1000 employees. On the contrary, the CNBC report gathered information concerning Binance’s headcount from an unnamed source. The source told CNBC that Binance would dismiss 1500 to 3000 employees in the coming days.
The inconsistency in the information from the news site challenged Binance to react. In a Twitter statement dated July 14, the chief executive of Binance, Changpeng “CZ” Zhao, rubbished the WSJ and CNBC claims arguing the numbers were way off.
In its previous headcount reduction, the Binance team dismissed around 8000 employees. In May, the crypto exchange confessed that its reorganization efforts focused more on reevaluating whether Binance had the right talent. It implies that Binance layoffs did not align with any rightsizing actions.
In a newsletter, journalist Colin Wu from Blockchain Wu cited multiple sources which indicated that Binance laid off staff in May. Earlier, the controversial exchange had announced that it would not reduce the headcount since it needed more time to focus on the existing talent density.
Factors Contributing to Binance Lay Off
Elsewhere Zhao tweeted that Binance was still having a new opening since there were few involuntary terminations. The Binance layoff plans came when the crypto exchange battled several legal cases.
Last month the US Securities and Exchange Commission accused Binance and the CEO of committing 13 charges that contravened the securities laws. The CEO reacted to the SEC charges blaming Alameda research for exposing Voyager to regulatory complexity. However, the executive confessed that Binance seeks bailouts to overcome the current liquidity crisis.
A revisit of the SEC filing revealed that Binance and the CEO breached federal securities law by exposing the customers at risk. The SEC argued that Binance’s noncompliance was aimed at enriching the CEO.
Before the SEC filing, the US Department of Justice (DOJ) had launched investigations on Binance to examine whether the exchange was compliant. Besides the DOJ investigations, another regulator outside the US has been probing Binance operations.
Will Binance Win the Ongoing Legal Charges?
A few days ago, the Belgium regulators ordered Binance to cease operations after failing to meet the licensing requirement in the Netherlands. Binance’s controversial operations have obliged French regulators to launch an investigation into the crypto exchange.
In response to the charges, Binance’s top executives, including chief strategy officer Patrick Hillmann announced plans to exit the troubled exchange. Hillmann’s departure came when the crypto exchange was celebrating its 6th anniversary. Speaking at the anniversary ceremony held on July 14, the Binance boss admitted that the journey was “never all smooth sailing” for the last six years.