Binance.US, the U.S. affiliate of the world's largest crypto exchange, laid off some employees following regulatory scrutiny and enforcement last week, according to several formal employees’ social media posts.
The layoffs affected about 50 people, a source told Reuters, which first reported the layoffs Thursday.
A former employee confirmed the layoffs to Banking Dive.
The former Binance.US backend developer, who spoke under the condition of anonymity, said that his manager set up a one-on-one meeting with him, and when the meeting started, the manager invited a human resources representative.
Upon disclosing to the employee that he was being laid off, the manager left the meeting, and the HR representative told the employee that the layoffs were a direct result of the lawsuit from the U.S. Securities and Exchange Commission, which as of last week, is suing Binance.US for alleged securities violations.
The developer was a full-time employee but also noted that all of the interns were laid off at the same time.
Among those dismissed were employees in product management, recruitment, and customer development, according to LinkedIn and Twitter posts of those affected. Reuters noted that employees in Binance.US's legal, compliance and risk departments were also among those affected.
Another affected employee on LinkedIn said that her layoff took effect Thursday.
A Binance.US spokesperson did not return a request for comment by press time.
According to a letter seen and reported by Bloomberg News, Binance.US’s board had asked management across the company to cut their teams’ sizes in “preparation for a multi-year and very costly litigation process.”
The SEC charged Binance, Binance.US, and their founder Changpeng Zhao with 13 violations of U.S. securities laws early last week.
The regulator alleged that Zhao is the head of Binance.US despite assertions otherwise, and alleged that although U.S. customers were supposed to be restricted from transacting on Binance.com, the platform secretly allowed high-value U.S. customers to do so.
Additionally, the SEC alleged Binance allowed customer assets to commingle and be diverted to other entities owned by Zhao.
In response to the SEC enforcement, Binance.US also halted U.S. dollar deposits on June 9 and said it also plans to halt withdrawals.
“The SEC has taken to using extremely aggressive and intimidating tactics in its pursuit of an ideological campaign against the American digital asset industry,” a spokesperson said in an emailed statement that day. “Binance.US and our business partners have not been spared in the use of these tactics, which has created challenges for the banks with whom we work.”
For a time, Binance.US will be a crypto-only exchange, the spokesperson said, and to that end will remain fully operational.