In a surprising turn of events, Binance, the world’s largest cryptocurrency exchange, has reportedly initiated a significant layoff of its workforce. The move comes as the company faces its toughest legal scrutiny since its inception six years ago. The exchange had previously stated its intention to fill hundreds of open positions while simultaneously reevaluating its overall headcount.
When approached for confirmation, Binance declined to disclose the exact number of employees affected by the layoff.
CEO Changpeng ‘CZ’ Zhao took to Twitter to address the situation, stating that the media reports regarding the numbers were inaccurate. However, The Wall Street Journal reported that over 1,000 employees had been let go, while CNBC cited an anonymous source claiming that Binance plans to lay off between 1,500 and 3,000 employees.
Prior to these layoffs, Binance boasted a global workforce of approximately 8,000 individuals, according to the exchange’s own statements. While the company did not explicitly confirm the exact number of job cuts, a Binance spokesperson acknowledged that layoffs had indeed taken place.
In response to the situation, Binance released a prepared statement reiterating a similar message shared back in May. The statement emphasized the company’s intention to reevaluate its talent pool rather than focusing on rightsizing. CEO CZ asserted on Twitter that the terminations were involuntary but clarified that the company was still actively hiring.
This recent development follows earlier reports of potential layoffs at Binance in May, which were mentioned by journalist Colin Wu in a newsletter, citing multiple sources. However, at that time, the exchange had chosen not to confirm the staff reductions, emphasizing a need to concentrate on talent density instead.
The decision to downsize Binance’s workforce coincides with a wave of regulatory and law enforcement investigations targeting the company. In June, the U.S. Securities and Exchange Commission (SEC) filed 13 civil charges against Binance, CEO CZ, and Binance US, a sister company that claims to operate independently. The SEC accused Binance and its executives of displaying a “blatant disregard” for federal securities laws while amassing billions of dollars in personal gains at the expense of investors.
Simultaneously, the U.S. Department of Justice has been conducting its own investigation into Binance for several years. As anticipation of federal charges looms, the company recently hired renowned criminal defense attorney George Canellos, a former co-director of the SEC’s Division of Enforcement.
The combination of the ongoing legal scrutiny and the recent layoffs undoubtedly presents a challenging period for Binance. The exchange will need to navigate these turbulent waters while striving to maintain its position as a key player in the cryptocurrency market.