Declining Profits Forces Binance Crypto Exchange to Cut Employee Benefits – Has the Bear Market Reversed?
Binance, the world’s largest cryptocurrency exchange, has become increasingly frugal amid declining profits after bragging about preparing a “war chest” last year.
A report by The Wall Street Journal (WSJ) last week said the company recently laid off 1,000 employees as a cost-cutting measure. On Monday, an internal Binance messenger and former company employees told the outlet that current workers have also been stripped off of various benefits, such as mobile phone reimbursement, fitness reimbursement, work-from-home expenses and other things.
The internal messenger stated that more cost-saving measures could be on the way. “Given the current market environment and regulatory climate which has unfortunately led to declining earnings, we must be more prudent with our spending,” the message read.
Binance’s troubles follow dual lawsuits from major US market regulators this year: one from the Commodity Futures and Trading Commission (CFTC) in March and another from the Securities and Exchange Commission (SEC). last month.
Taken together, the lawsuits accuse the exchange of registration failures, securities/commodity trading violations, mishandling of client funds, and an inappropriate relationship with its US subsidiary, Binance.US. Rumors are also circulating about an upcoming Justice Department investigation into its chief executive, Changpeng Zhao (CZ).
However, according to Zhao, Binance does not have as many problems as the media claims. While he conceded that headcount had been reduced, he dismissed the WSJ’s layoff figure of 1,000 as “far off” and insisted the company was simply reassessing roles and “talent density.”
He reiterated his upbeat message to employees on Friday, stating that Binance was still hiring, profitable, and unaffected by the SEC charges, according to WSJ. However, he acknowledged that more layoffs could occur in three to six months, and he did not know when benefits might be restored.
The firm is “reviewing certain products, business units, staff benefits and policies to ensure our resources are appropriately allocated to reflect the evolving demands of users and regulators,” a company spokesperson said.
CZ also denied that there was any sort of internal problem at Binance after a slew of company executives resigned in quick succession over the past month. These included General Counsel Han Ng, Senior Vice President of Compliance Steven Christie and Chief Strategy Officer Patrick Hillman.
hillman too denied that his departure was related to some internal conflict at Binance.