Binance.US Fires 50 Employees Amid Legal Difficulties With the SEC

Key Points:

• Binance.US has laid off several employees after authorities sued it for breaking securities laws and moved to seize its assets last week.
• Around 50 employees were laid off.
• Workers from the company’s legal, compliance, and risk departments were among those let go, with the request for anonymity since the case is confidential.

According to Reuters, citing two people familiar with the matter, Binance.US fired fifty people, spreading across the legal, compliance, and risk departments.

Additionally, two Binance.US employees said on LinkedIn Wednesday that they were leaving, with one referring to a “round of layoffs.” According to the sources, around 50 individuals were laid off.

The SEC charged Binance and its founder and CEO Changpeng Zhao on June 5 with forming Binance.US as part of a “web of deception” to avoid rules designed to safeguard U.S. investors. Binance has said that it would defend itself vigorously. The world’s biggest exchange claims that it would do everything in its power to defend the platform. Binance also feels that the SEC’s failure to collaborate in good faith is a miscalculation in terms of establishing clear standards for the digital asset market.

The SEC also charged BAM Trading, Binance.US’ operational firm, with misleading investors about non-existent trading restrictions on its platform.

The SEC then petitioned a federal court to seize Binance.US’ assets, which included more than $2.2 billion in cryptocurrency and $377 million in bank accounts. The SEC voiced worry that the exchange may cause such monies to be moved abroad.

The ambiguous definition of “security” was one of the SEC’s contentious points in the case. In February, SEC Chairman Gary Gensler indicated that, with the exception of Bitcoin, all cryptocurrencies are securities and are subject to SEC oversight.

Yet, both the crypto community and industry professionals criticized Gensler’s stance. Even the Commodities and Futures Trade Commission (CFTC) in the United States is divided. Binance might use the lack of agreement between the two agencies to its advantage in its struggle with the SEC. The community deemed the SEC’s rules for distinguishing securities to be excessively ambiguous during the argument over whether Ethereum is a commodity or a security.

In March, Gensler claimed that Ethereum uses a Proof-of-Stake (PoS) technology that should completely fulfill securities rules. Yet, at his hearing before the US Congress a month later, he declined to say if Ethereum is a security.

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Harold

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