Brian Shroder, the Chief Executive Officer of Binance.US, has stepped down from his role at the cryptocurrency trading platform. He has been temporarily replaced by Chief Legal Officer Norman Reed, as confirmed by a spokesperson from the company.
This development coincides with Binance.US's decision to cut over one-third of its workforce, amounting to more than 100 positions. The move comes as increased regulatory scrutiny takes a toll on the platform's operations. Binance.US, formally known as BAM Trading Services Inc., was established in 2019 to cater to U.S. users who are not allowed to use Binance Holdings.
This marks the second round of job cuts for the Miami-based firm this year, as it grapples with mounting legal and operational challenges. In June, the U.S. Securities and Exchange Commission (SEC) accused Binance Holdings, Changpeng "CZ" Zhao, and Binance.US of mishandling customer funds, misleading investors and regulators, and violating securities regulations. These allegations have been denied by Zhao and the companies.
In March, the U.S. Commodity Futures Trading Commission (CFTC) charged Binance and Zhao with "willful evasion of federal law." The Justice Department is also investigating Binance, although it has not accused the company of any wrongdoing.
Following the SEC's actions, Binance.US customers faced difficulties with depositing or withdrawing dollars as several banking partners severed ties with the platform. The company had to implement an alternative method for users to convert dollars into cryptocurrencies.
Binance.US's global market share has declined to approximately 0.6% from around 2.39% in April, according to Jacob Joseph, an analyst at CCData. Monthly trading volume has also dropped below levels seen in early 2020.
In response to the challenges, a spokesperson from Binance.US stated, "The actions we are taking today provide Binance.US with more than seven years of financial runway and enable us to continue to serve our customers while we operate as a crypto-only exchange. The SEC's aggressive attempts to cripple our industry and the resulting impacts on our business have real-world consequences for American jobs and innovation, and this is an unfortunate example of that."
Prior to these developments, Binance.US had already laid off an unspecified number of employees after the SEC's actions were reported by Bloomberg in June. Meanwhile, Binance Holdings has witnessed several executive departures and layoffs in recent months, further highlighting the challenges facing the cryptocurrency exchange.
News, B. (2023) Binance US CEO Departs as Crypto Platform Cuts Third of Staff - BNN Bloomberg, BNN. Available at: https://www.bnnbloomberg.ca/binance-us-ceo-departs-as-crypto-platform-cuts-third-of-staff-1.1970552#:~:text=(Bloomberg)%20%2D%2D%20Binance.US (Accessed: 13 September 2023).