Crypto giant Binance’s US subsidiary fires employees following SEC charges

LONDON, June 15 (Reuters) – The U.S. subsidiary of crypto giant Binance has carried out a round of layoffs since regulators last week accused it of violating securities laws and sought to freeze its assets, two people with knowledge of the layoffs and employee social media posts said. Media.

One of the sources said about 50 people were laid off. Reuters was unable to independently confirm the number or seniority of the affected employees.

A spokesperson for Binance.US did not respond to emails and calls seeking comment.

Employees of Binance.US’s legal, compliance and risk departments were among those dismissed, the people told Reuters, requesting anonymity because the matter is private.

On June 5, the SEC accused Binance and its founder and CEO Changpeng Zhao of creating Binance.US as part of a “web of deception” to evade securities laws aimed at protecting US investors. Binance said it would defend itself “vigorously”.

The SEC also sued Binance.US’s operating company, BAM Trading, alleging it misled investors about “non-existent trading” controls over the platform.

A day later, the SEC asked a federal court to freeze Binance.US’ assets, including more than $2.2 billion held in crypto and about $377 million in U.S. dollar bank accounts. The SEC expressed concern that the exchange could move these funds offshore.

Binance.US called the request “unwarranted” and said the SEC’s allegations were “unwarranted”.

“Due to our preparation for a protracted and very costly legal battle, the board asked management to realign our organization and reduce our burn rate to ensure long-term viability,” Binance.US CEO Brian Shroder wrote to employees in a message seen . by Reuters.

“ESTABLISHMENT ROUND”

Two Binance.US employees said on LinkedIn on Wednesday that they are leaving the company, citing a “round of layoffs.”

In a June 9 chirping, Binance.US’s banking partners were preparing to stop dollar withdrawals as early as June 13 following the SEC’s “increasingly aggressive tactics.” It gave customers until then to withdraw their money, and said it planned to become a “crypto-only exchange.”

Binance.US had avoided layoffs over the past year, Shroder wrote in the message. “However, the SEC and the response from our banking partners have now forced us to change our approach.”

In a court filing on Monday, Binance.US’s operator, BAM Trading, said the SEC’s asset freeze request would “effectively put BAM out of business.”

“Without the ability to pay its employees, suppliers, vendors and professionals in the ordinary course of business and maintain its technology platform, operations would quickly grind to a halt,” it wrote.

Reporting by Angus Berwick and Tom Wilson; edited by Elisa Martinuzzi, Richard Chang and Louise Heavens

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