California: Binance.US, the American affiliate of Binance Holdings founded by Changpeng Zhao, laid off an unspecified number of employees as the crypto firm prepares for what is likely to be an expensive legal battle with US regulators.
A spokesperson for the company confirmed the job cuts, without providing specifics. Reuters earlier reported that about 50 people were affected, citing one unnamed person with knowledge of the dismissals.
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In a Wednesday letter to employees, seen by Bloomberg News, the company said the board had asked the management to shrink the size of teams across the company, because of its “preparation for a multi-year and very costly litigation process.” Binance calls itself a virtual company and says it doesn’t have a headquarters. Binance.US’s principal place of business is Miami, according to the SEC complaint.
This month, Binance.US said it was being cut off by its payment and banking partners, forcing it to convert to a crypto-only exchange.
The exchange was targeted by the US Securities and Exchange Commission last week alongside Binance Holdings Ltd., operator of the much larger crypto venue Binance.com, for allegedly mishandling customer funds, misleading investors and regulators, and breaking securities rules. The companies have disputed the allegations.
On Tuesday, Binance.US and the SEC agreed to work on a deal that avoids a total asset freeze at the cryptocurrency trading platform. Binance.US said a freeze would essentially put it out of business.
