Binance Holdings Ltd billionaire and CEO Changpeng Zhao speaks during the Web Summit in Lisbon, Portugal, Wednesday, Nov. 2, 2022.
Zed Jameson | Bloomberg | Getty Images
cryptocurrency exchange Binance The company is laying off workers in response to an ongoing Justice Department investigation that could end in a consent order or a settlement, according to a current employee familiar with the company’s plans.
The layoffs will lead to 1,500 to 3,000 layoffs at Binance Global and will last until the end of the year, the person told CNBC. Previously, The Wall Street Journal report Sources told CNBC that on Friday, 1,000 employees had been laid off as part of a planned total. The people requested anonymity because they are not authorized to speak to the media about internal matters.
The DOJ investigation could fundamentally reshape the company, the employee told CNBC. If Binance chooses to settle the DOJ’s charges, it could result in billions of dollars in damages.Reuters has report Federal prosecutors have been weighing anti-money laundering violations and sanctions evasion charges that would make it difficult for Binance or founder Changpeng Zhao to continue obtaining a license to operate.
A Binance spokesperson disputed the claim that the layoffs would affect 3,000 employees, saying the high-end figure was “simply not true.”
“As we prepare for the next major bull market cycle, it’s clear that we need to focus on talent density across the organization to ensure we remain agile and dynamic,” the spokesperson said. “This is not a case of downsizing, but a case of The Case for Resizing.” – Assessing whether we have the right talent and expertise for key roles. “
Binance has faced major regulatory challenges over the past few months, culminating in lawsuits from the SEC and the Commodity Futures Trading Commission for allegedly mishandling customer assets and operating an illegal, unregistered exchange in the U.S.
Binance founder Changpeng Zhao has repeatedly dismissed concerns about the exchange’s future, even after being named in the SEC lawsuit. Binance itself has suffered significant losses since the U.S. regulator filed the lawsuit, with outflows from the exchange amounting to hundreds of millions of dollars. The company has also seen some key executive departures.