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Changpeng Zhao, billionaire and CEO of Binance Holdings Ltd. , during a session at the Web Summit in Lisbon, Portugal, on Wednesday, November 2, 2022.
Zed Jameson | bloomberg | Getty Images
Cryptocurrency exchange binance It is laying off employees in response to an ongoing Justice Department investigation that will likely end in a consent or settlement decree, according to a current employee familiar with the company’s plans.
The cuts will eliminate 1,500 to 3,000 from Binance’s global workforce, this person told CNBC, and will take place through the end of the year. Formerly The Wall Street Journal mentioned The source told CNBC on Friday that 1,000 employees have already been laid off, and that these layoffs are part of the planned total. This person asked not to be identified because he is not authorized to speak to the press about internal matters.
The employee told CNBC that the DOJ investigation is likely to fundamentally reshape the company. If Binance chooses to settle the DOJ allegations, it could result in a multi-billion dollar payout. Reuters has mentioned that federal prosecutors are looking into anti-money laundering violations and sanctions evasion charges, allegations that will make it difficult for Binance or its founder Changpeng Zhao to continue to obtain licenses to operate.
A Binance spokesperson doubted that the cuts would affect 3,000 employees, saying that the number of superstar employees is “not correct.”
The spokesperson said: “As we prepare for the next major upward cycle, it has become clear that we need to focus on talent density across the organization to ensure we remain agile and dynamic. This is not a case of adjusting, but rather a re-assessment of whether we have the right talent and experience in decisive roles.
Binance has faced significant regulatory challenges over the past few months, culminating in lawsuits from the Securities and Exchange Commission and the CFTC over alleged mishandling of customer assets and the operation of an illegal, unregistered exchange in the US.
Binance founder Changpeng Zhao has repeatedly dismissed concerns about the future of the exchange, even after he was personally named in the SEC lawsuit. Binance itself has suffered greatly since the lawsuits brought by US regulators, with exchange inflows running into the hundreds of millions. The company has also experienced a number of key executive departures.
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