Binance, one of the world’s largest cryptocurrency exchanges, has reportedly started a round of layoffs. seconds to sources who spoke to Chinese journalist 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, although 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 hiring.
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The exact reasons behind the reported layoffs at Binance are currently unclear, but several factors may have contributed to the decision. The overall poor market conditions in the cryptocurrency industry may have played a role, as many of the 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 like 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 major players in the cryptocurrency industry, it may have also led to an increase in overhead costs and the need to restructure the organization.
It is worth noting that Binance has faced regulatory challenges from several jurisdictions, which may 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 ongoing SEC crackdown in the US shows no signs of slowing down in 2023, which could be a contributing factor to Binance’s decision to lay off employees.
In addition, according to reports Bitcoinist on May 30, the South Korean government suggested implementing real-time monitoring to freeze funds on Binance. The proposal is part of the country’s efforts to strengthen its regulatory oversight of the cryptocurrency industry.
The proposal was reportedly made by the Financial Services Commission (FSC) during a meeting with Binance representatives. The FSC reportedly suggested that the exchange implement real-time monitoring technology to detect and freeze any funds that may be associated with illegal activities, such as money laundering or terrorist financing.
As of press time, Binance has not issued an official statement regarding the layoffs. And it’s unclear which departments are affected by the job cuts or how many employees will be affected.
BTC downtrend on 1-day chart. Source: BTCUSDT on TradingView.com
Featured image by Unsplash, graphic by TradingView.com
