US subsidiary of crypto firm Finance lays off employees after SEC allegations

LONDON, June 15 (Reuters) – The U.S. subsidiary of crypto firm Finans has made a round of layoffs since regulators last week sought to freeze its assets after accusing it of violating securities laws, two people with knowledge of the layoffs and employees said. Social media posts.

Around 50 people have been laid off, a source said. Reuters could not independently verify the number or seniority of affected employees.

A Binance.US spokesperson did not respond to emails and calls seeking comment.

Among the layoffs were employees in Binance.US’s legal, compliance and risk departments, the people told Reuters on condition of anonymity because the matter is private.

On June 5 the SEC accused Binance and its founder and CEO Changpeng Zhao of creating Binance.US as part of a “web of deception” to evade securities laws aimed at protecting US investors. Binance said it will protect itself “vigorously”.

The SEC also sued Binance.US’s operating company BAM Trading, accusing it of misleading investors about “no-trade” restrictions on its platform.

A day later, the SEC asked a federal court to freeze Binance.US’s assets, which include more than $2.2 billion in crypto and some $377 million in US dollar bank accounts. The SEC expressed concern that the exchange could move those funds offshore.

Binance.US called the request “unnecessary” and the SEC’s allegations “unjustified.”

“Due to our preparation for a protracted and very expensive legal battle, the board has asked management to reduce our burn rate to ensure the right size and long-term viability of our company,” Binance.US CEO Brian Schroeder wrote in a message to employees. By Reuters.

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‘Round of Layoff’

Two Binance.US employees announced on LinkedIn on Wednesday that they were leaving the company, one citing a “round of layoffs.”

On a June 9 Tweet, Binance.US was preparing to halt dollar withdrawals on June 13 after its banking partners responded to the SEC’s “increasingly aggressive tactics.” Until then it allowed customers to withdraw their funds, saying it plans to become a “crypto-only exchange”.

Binance.US avoided layoffs last year, Schroeder wrote in the news. “However, the response from the SEC and our banking partners now forces us to change our approach.”

BAM Trading, the operator of Binance.US, said in a court filing on Monday that the SEC’s asset freeze request would “effectively put BAM out of business.”

“Without the ability to pay its employees, vendors, suppliers and professionals in the normal course of business to maintain its technology base, operations would quickly cease,” it wrote.

Angus Berwick and Tom Wilson report; Edited by Elisa Martinuzzi, Richard Chang, and Louise Heavens

Our Standards: Thomson Reuters Trust Principles.

Angus Berwick

Thomson Reuters

An award-winning investigative reporter based in London with a focus on financial institution journalism. He was previously a correspondent in Spain and Venezuela, where he reported on the Maduro government’s efforts to retain power. He is the 2019 Reuters Journalist of the Year and has won two Foreign Press Club awards.

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