A Massive Layoff Round at Binance.US

The report further detailed that the laid-off staff belonged to Binance.US' legal, compliance, and risk departments. Binance.US did not confirm the layoffs officially, however, at least two employees of the US-based crypto exchange confirmed their exit on Wednesday on the professional social media platform Linkedin.

Earlier, independent journalist Colin Wu also revealed that Binance had laid off 20 percent of its employees from its total headcount of 8,000. However, Binance's Chief Strategy Officer, Patrick Hillmann, spun the layoff, calling it a "talent density audit and resource allocation exercise."

Regulatory Troubles

The latest layoffs came after the US Securities and Exchange Commission (SEC) brought a civil lawsuit against Binance, its two US affiliate firms, and CEO Changpeng Zhao. They are facing 13 charges for the offenses, including the operation of illegal trading platforms, offering unregistered crypto asset securities, and commingling customers'  funds.

The lawsuit also alleged Zhao and Binance.com have tight controls over BAM Trading, which operates Binance.US. Though Zhao did not hold any executive positions in the US affiliate, the staff of BAM Trading referred to his controls as "shackles" that prevented them from understanding and freely operating the US platform. A former CEO of BAM Trading even told Binance's CFO that her "entire team feels like [it had] been duped into being a puppet."

The lawsuit also specifically charged BAM Trading for misleading investors about "non-existent trading" controls over its platform.

Meanwhile, the SEC is now seeking to freeze the assets of Binance.US, which include more than $2.2 billion held in crypto and some $377 million in US dollar bank accounts, and already filed a petition in the court. The SEC is concerned that the company would move these funds offshore, but Binace.US is saying that such an asset freeze would cripple its business.