Binance, one of the largest cryptocurrency exchanges in the world, has allegedly initiated a round of layoffs, according to sources who spoke with Chinese reporter Colin Wu, who runs the popular blockchain-focused Twitter account WuBlockchain.
Multiple sources have confirmed to WuBlockchain that the exchange has begun laying off employees, though the proportion of layoffs remains uncertain. With a reported total of around 8,000 employees, rumors suggest that the proportion of layoffs in June was approximately 20%.
Binance In Crisis?
According to Colin Wu, the compensation plan for affected employees will be formulated based on different situations in different locations. However, it is worth noting that some departments are still reportedly continuing to recruit.
The exact reasons behind the reported layoffs at Binance are currently unclear, but several factors may have contributed to the decision. The poor overall market conditions in the cryptocurrency industry may have played a role, as many major cryptocurrencies have experienced significant price declines in recent months.
This can have a ripple effect on the industry as a whole, leading to decreased trading volumes and reduced revenue for exchanges such as Binance.
Another possible factor could be the company’s rapid expansion in recent years. Binance has been aggressively expanding its operations, launching new products and services, and expanding into new markets.
While this expansion has helped the company become one of the largest players in the cryptocurrency industry, it may have also led to increased overhead costs and a need to restructure the organization.
It is worth noting that Binance has faced regulatory challenges from various jurisdictions, which could have contributed to the decision to initiate layoffs. In recent years, regulators in the UK and Japan have issued warnings to the platform.
Additionally, the exchange has faced scrutiny from regulators in other countries, including the United States, where the Securities and Exchange Commission (SEC) has been cracking down on cryptocurrency companies.
The SEC’s continuous crackdown in the United States shows no signs of slowing down in 2023, which could be a contributing factor in Binance’s decision to lay off employees.
What’s more, as reported by Bitcoinist on May 30, the South Korean government has suggested the implementation of real-time surveillance for the freezing of funds on Binance. The proposal comes as part of the country’s efforts to strengthen its regulatory oversight of the cryptocurrency industry.
According to reports, the proposal was made by the Financial Services Commission (FSC) during a meeting with representatives from Binance. The FSC reportedly suggested that the exchange implement real-time surveillance technology to detect and freeze any funds that may be associated with illegal activity, such as money laundering or terrorist financing.
As of press time, Binance has not issued any official statement regarding the layoffs. And it is unclear which departments are affected by the job cuts, or how many employees will be impacted.
Featured image from Unsplash, chart from TradingView.com