The U.S. Securities and Exchange Commission (SEC) lawsuit against Binance.US put the crypto exchange in a tough position, resulting in staff cuts to prepare for “costly litigation,” said the firm’s management in an email to employees on Thursday.
“The move to become a crypto-only exchange was not a decision but rather a circumstance driven by a politically motivated regulator,” said Binance.US management in the email seen by CoinDesk.
As part of this transition, the management team said it has received instructions from the board to shrink the size of teams across the company and reduce the burn rate. The exchange’s management also said it is preparing for “a multi-year and very costly litigation process.”
“Unlike every other U.S. crypto company, we have been working to avoid this scenario, but circumstances have now shifted. This was a very hard decision – one that we didn’t take lightly,” read the email.
“We are sad to see our colleagues depart, but we wish them the best and will do what we can to assist them in this transition.”
Sources with knowledge of the matter told Reuters that around 50 employees were laid off in the process. Binance.US employees working in legal, compliance and risk departments were reportedly among those dismissed.
LinkedIn page shows that the company has about 500 employees, suggesting a 10% reduction.
Last month, Binance’s senior executives addressed reports that the global exchange planned to cut around 20% of its 8,000 employees in the month of June. Binance’s chief communications officer Patrick Hillmann described the staff cuts as a routine “talent density audit,” saying that streamlining its workforce has been a part of “Binance’s secret sauce.”
Binance CEO Changpeng Zhao also weighed in on Crypto Twitter then, explaining that the exchange often lets go of people that are not a good fit for the company’s culture, regardless of how they perform at work.