A source trusted by Reuters said the job cuts targeted 50 employees in Binance's legal and compliance team.
The layoffs are said to come after the SEC lawsuit hit a deadlock in its cryptocurrency trading business, with Binance experiencing massive withdrawals of digital assets worth US$1 billion last week.
Not only that, but the well-known cryptocurrency trading platform saw a $503 million outflow after the SEC filed a lawsuit against Binance and its founder Champeng Chao in the District Court of Columbia.
Binance operates an illegal business
Binance's decline began shortly after Binance's US operator, BAM Trading, was accused of misleading investors regarding trading regulations that did not exist on its platform.
Binance was also accused of violating the U.S. Securities Act of 1933 and the Securities Exchange Act of 1934 by selling unregistered securities.
CEO Zhao was also involved in market manipulation and wash trading to increase cryptocurrency trading volume on Binance US.
This string of issues prompted the SEC to drop 13 lawsuits and suspend all deposit and withdrawal transactions on Binance in USD fiat starting Tuesday (June 13, 2023).
Under the pretext of maintaining the status quo and ensuring the safety and availability of assets owned by Binance so that investors would not be harmed if Binance were to go bankrupt.
SEC Chairman Gary Gensler said, “Throughout the 13 indictments, we allege that Zhao and Binance entities engaged in widespread fraud, conflicts of interest, under-disclosure and deliberate evasion.”
The lawsuit provoked a negative reaction from Binance investors, who panicked and desperate to rush their funds and withdraw their crypto reserves on a large scale.
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