Binance, the world’s largest cryptocurrency exchange, has recently been cutting costs due to a decline in profits – despite having a “war chest” last year. According to The Wall Street Journal (WSJ), the firm has laid off 1000 employees and removed various benefits for current workers, such as mobile-phone reimbursement, fitness reimbursement, and work-from-home expenses.
The cost-cutting measures come after the exchange was hit with two lawsuits from the US’ chief market regulators: the Commodities and Futures Trading Commission (CFTC) in March and the Securities and Exchange Commission (SEC) last month. The lawsuits accused Binance of registration failures, securities/ commodities trading violations, mishandling of customer funds, and an improper relationship with its US subsidiary, Binance.US. Additionally, rumors are circulating about an upcoming investigation by the Justice Department into its CEO, Changpeng Zhao (CZ).
However, CZ has rejected WSJ’s 1000-person layoff figure as “way off” and stated that the firm was merely reevaluating roles and “talent density”. He also said that Binance is still profitable, unimpacted by the SEC’s charges, and hiring. Additionally, CZ denied any internal conflict at Binance after a number of executives resigned in quick succession over the past month.
A company spokesperson commented on the situation, saying that Binance is “looking at certain products, business units, staff benefits, and policies to ensure our resources are allocated properly to reflect the evolving demands of users and regulators”.
Despite the cost-cutting measures, CZ reassured employees that more layoffs and benefit restrictions may not come for three to six months.
