The U.S. Securities and Exchange Commission’s (SEC) crackdown on cryptocurrency companies appears to have severely impacted Binance’s business. The cryptocurrency exchange has reportedly laid off more than 1,000 employees and cut some benefits over the past few weeks, according to reports.
Binance said the “current market environment and regulatory environment” had resulted in lower profits, suggesting further cuts to profits may be under consideration. A spokesperson told Cointelegraph that the company will consider scaling back “certain products, business units, employee benefits and policies” in response to business and regulatory concerns.
Binance has yet to face the 13 charges brought against it by the courts and the SEC, as well as the findings of the DOJ investigation into its activities and executives.
Despite the uncertain outlook, Binance remains the most popular centralized cryptocurrency exchange in the world, with assets worth more than $63 billion. DefiLlama’s Token Breakdown programme The majority of assets held by Binance include Tether (USDT) (27.55%), Bitcoin (BTC) (26.95%), BNB (BNB) (12.82%) and wrapped Ether (10.08%).
Speaking on Binance’s anniversary on July 14, the exchange’s CEO Changpeng Zhao recalled that the company’s journey “has never been smooth sailing.”
This week’s Crypto Biz looks at Binance’s ongoing efforts to stem declining profits, Ripple’s expectations that Bank of America may soon adopt XRP (XRP), and the first signs of venture capital returning to cryptocurrencies.
Ripple CLO Says Court Ruling May Encourage Banks to Adopt XRP
Ripple Labs Chief Legal Officer Stu Alderoty believes that based on recent court rulings, U.S. banks may turn to XRP for cross-border transactions. “Hopefully there will be a lot of conversations with customers in the U.S. this quarter, and hopefully some of those conversations will actually turn into real business,” he said in an interview. With the “safety” label seemingly no longer hanging over XRP, partnerships between Ripple and banks, weakened by the SEC lawsuit, could be reborn. Bank of America has been eyeing the blockchain company since 2019, and American Express first partnered with Ripple in 2017.
#new: Chairman @Patrick McHenry and @CongressmanGT Statement on the court ruling in SEC v. Ripple and the need for legislative clarity in the digital asset ecosystem to prevent further uncertainty in our financial markets.
read more pic.twitter.com/tn0dn0BDHd
— Financial Services Republicans (@FinancialCmte) July 14, 2023
Binance Cuts Employee Benefits Citing ‘Dropping Profits’
Global cryptocurrency exchange Binance has cut certain employee benefits as part of a company reevaluation. The company reportedly stopped reimbursing employees for certain expenses, including cell phone use, gym and working from home. Binance pointed to lower profits due to the “current market environment and regulatory environment,” suggesting that more cost-cutting measures may be required. The report follows massive layoffs in June that affected more than 1,000 employees at the exchange. Both Binance and Zhao are being sued by the U.S. Securities and Exchange Commission (SEC) for allegedly offering unregistered securities in the United States.
Marathon shareholders sue company executives
Cryptocurrency mining firm Marathon Digital has been sued in court for breaching fiduciary duties by CEO Fred Thiel and other executives, unfairly enriching themselves and squandering company assets. The complaint alleges that the company’s management consistently downplayed its problems, artificially inflated Marathon’s valuation, charged exorbitant compensation, engaged in lucrative insider sales, and collected unreasonably high bonuses based on false and misleading statements.
Polychain Capital and Coinfund Raise $350M for New Cryptocurrency Fund
Web3 Ventures is gearing up for new investments in crypto projects, with Polychain Capital raising $200 million for a new investment fund and Coinfund raising $152 million for seed funding. Polychain still intends to raise a total of $400 million for the new fund. Currently operates three funds with approximately US$2.6 billion in assets under management. As for Coinfund, its chief executive, Jake Brukhman, said the company set a goal of raising $125 million but ended up raising another $27 million thanks to renewed interest in the industry. Total venture capital investment in crypto startups fell 76% year-over-year amid the bear market and industry turmoil.
July marks CoinFund’s 8th anniversary, celebrate @jbrukh @flexthought And the team from the dinner table to the cap table.We are pleased to announce that CoinFund has closed its $158 million Seed IV fund to support the leaders of the new internet, advancing this milestone
pic.twitter.com/6kwBFuIHiy— CoinFund (@coinfund_io) July 18, 2023
Before We Go: Mark Yusko Predicts Bitcoin Rally Will Lead to “Speculative Peak” in 2024
Mark Yusko, chief investment officer and founder of Morgan Creek Capital, said BlackRock’s application for a spot bitcoin exchange-traded fund sparked the start of a new cryptocurrency bull market that will go parabolic sometime closer to the April 2024 halving.
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