- Binance plans to lay off between 1,500 and 3,000 employees through the year in response to an ongoing Justice Department probe, a current employee familiar with the company’s plans told CNBC. A company spokesperson disputed the higher number.
- The company has already laid off 1,000, the Wall Street Journal reported earlier on Friday, and this number is part of the total, CNBC’s source said.
- Binance has been charged by both the SEC and CFTC with various securities and commodities violations, while founder Changpeng Zhao has downplayed concerns.
According to a current employee who is familiar with the company’s plans, cryptocurrency exchange Binance is firing staff members in response to a Justice Department investigation that will probably result in a consent decree or settlement.
Crypto exchange Binance is laying off employees in response to an ongoing Justice Department probe that is likely to end with a consent decree or settlement, according to a current employee who is familiar with the company’s plans.
According to this source, 1,500 to 3,000 members of Binance’s global workforce would be let go by the end of the year. The source informed CNBC that the 1,000 layoffs that were already announced by The Wall Street Journal on Friday are just a portion of the total that are anticipated. Because they are not permitted to speak to the media about private problems, this person requested anonymity.
The Justice Department probe will likely reshape the company fundamentally, the employee told CNBC. If Binance opts to settle the DOJ allegations, it could result in a multi-billion dollar payment. Reuters has reported that federal prosecutors have been weighing anti-money laundering violations and sanctions evasion charges, allegations that would make it difficult for Binance or founder Changpeng Zhao to continue to get licenses to operate.
The individual told CNBC that the Justice Department investigation will probably fundamentally alter the corporation. If Binance decides to resolve the DOJ allegations, it might have to pay out many billions of dollars. According to Reuters, federal prosecutors are considering accusations of sanctions evasion and anti-money laundering offences, which would make it challenging for Binance or its founder Changpeng Zhao to continue receiving operating licences.
The spokesperson stated, “It has become evident that we need to focus on talent density across the organisation to ensure we remain nimble and dynamic as we prepare for the next significant bull cycle. Instead of right-sizing, we should reevaluate if we have the necessary ability and knowledge for key tasks.
The Securities and Exchange Commission and the Commodity Futures Trading Commission have filed lawsuits against Binance over the alleged mishandling of customer assets and the operation of an illegal, unregistered exchange in the United States. Binance has faced significant regulatory challenges over the past few months.
Even after being specifically mentioned in the SEC’s lawsuit, Changpeng Zhao, the founder of Binance, has repeatedly dismissed worries about the exchange’s viability. Since the U.S. regulators’ actions, Binance has suffered substantially, with exchange outflows reaching the hundreds of millions of dollars. In addition, a number of important executives have left the organisation.