Binance.US Axed Two-Thirds of Staff, Revenue Tanked 75% after SEC Lawsuit: COO
Binance’s US arm imploded following SEC allegations regarding violations of securities law, according to the subsidiary’s COO Christopher Blodgett.
In a recently disclosed deposition from Dec. 15, Blodgett said that the SEC lawsuit severely impacted the division, likening it to a “near-mortal blow.” As a result, the company was forced to lay off more than 200 employees since June, equating to about two-thirds of its workforce.
The SEC sued Binance in June last year, naming co-founder Changpeng Zhao and BAM Trading, which operates Binance’s US branch, in the suit. The agency alleged that BNB and BUSD are unregistered securities. Additionally, BAM Trading’s staking program was described as an investment contract, falling within the SEC’s definition of a security.
By November, Binance agreed to a $4.3b settlement with the Department of Justice and the Commodity Futures Trading Commission for violations related to illicit finance. Despite this settlement, the SEC’s case against Binance remains unresolved.
As part of its lawsuit, the SEC requested a temporary restraining order (TRO) against the entities. This was done to freeze funds until Binance.US could demonstrate that neither Binance nor its majority owner, Zhao, could access them.
Following the order, about $1b worth of assets, including crypto and fiat, were withdrawn from the platform, according to Blodgett. He further stated that the accusations significantly eroded institutional confidence in Binance.US.
“For example, prior to the TRO, we had… in excess of 20 market makers operating on the platform. Subsequent to that, the number is less than five,” he said.
Since the order, the subsidiary has lost two banking partners and hasn’t secured replacements, according to
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