Binance.US has reportedly laid off about 50 people in the wake of recent regulatory action.
The job cuts, reported Friday (June 16) by Reuters, came after the U.S. Securities and Exchange Commission (SEC) accused parent company Binance of securities law violations and tried to freeze the assets of Binance.US.
The Reuters report, citing unnamed sources and social media posts, said workers in legal, compliance and risk departments at Binance.US were among those let go.
PYMNTS has reached out to Binance.US for comment but has not yet received a reply.
The company had warned in a court filing earlier this week that the SEC’s attempt to freeze its assets would essentially put it out of business.
“The requested relief would primarily harm BAM’s customers, effectively put BAM out of business, and prevent BAM from defending itself in this litigation,” the filing said, “BAM” being BAM Trading Services, the company behind Binance.US.
“Without the ability to pay its employees, vendors, suppliers, and professionals in the ordinary course of business and to maintain its technology platform, operations would quickly grind to a halt and BAM would be unable to even fund its defense to this action.”
Days later, the company and the SEC appeared in court in Washington, D.C. and agreed to work on a compromise that would protect the exchange’s customers’ funds without having to freeze the cryptocurrency exchange’s assets.
The SEC filed 13 charges against Binance — the world’s largest crypto exchange — and founder Changpeng Zhao on June 5, accusing them of securities law violations and claiming the platform “engaged in an extensive web of deception.”
Less than 24 hours later, the regulator sued the U.S.-based and publicly listed crypto exchange Coinbase, accusing the platform of letting its users trade unregistered securities.
As PYMNTS noted last week, an SEC case against Coinbase has been expected ever since the exchange revealed it had received a “Wells notice” from the agency in March.
Coinbase has consistently maintained that the SEC has failed to provide it with a clear way to register as a compliant trading company.
“From the point of view of Coinbase, the SEC suit has a fatal flaw — none of the digital assets under discussion represent investment contracts, even if they may be the objects of those contracts,” PYMNTS wrote recently.
Binance, meanwhile, has said it intends to “vigorously” defend its platform and argues it has worked with the SEC’s investigators to address the agency’s concerns.
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