Crypto exchange Binance is laying off at least 1,000 employees globally, The Wall Street Journal and CNBC reported Friday.
A Binance spokesperson confirmed the cuts Monday but did not specify how many employees were affected.
"Over the last 6 years, we have grown from 30 to a team of almost 8,000 across the globe,” the spokesperson told Banking Dive via email. “As we prepare for the next major bullcycle, it has become clear that we need to focus on talent density across the organization to ensure we remain nimble and dynamic.”
The spokesperson added: “This is not a case of rightsizing, but rather, reevaluating whether we have the right talent and expertise in critical roles. This will include looking at certain products, business units, staff benefits and policies to ensure our resources are allocated properly to reflect the evolving demands of users and regulators.”
The company told employees last month that it would stop offering certain benefits, including mobile-phone reimbursement, fitness reimbursement and work-from-home expenses, according to a message from Binance’s internal messenger seen by The Wall Street Journal.
“Considering the current market environment and regulatory climate that has unfortunately led to a decline in profit, we have to be more prudent with our spending,” read the message, which added more cost-cutting could come.
Binance’s CEO, Changpeng Zhao, said there could be additional layoffs every three to six months, according to the Journal, which reported Friday that 1,000 employees had already been laid off globally.
CNBC, meanwhile, put total layoffs at between 1,500 and 3,000. A Binance spokesperson, however, told the outlet that its high-end number was “just not right.”
Some of the employees downsized last week were asked to sign termination agreements offering two months’ salary, to be paid in Binance’s crypto token, BNB, according to documents seen by The Wall Street Journal.
In the U.S., some received a month of severance in dollars, the publication reported.
In contrast to the “talent density” narrative, CNBC reported the layoffs were in response to an ongoing Justice Department probe, citing an employee who wished to remain anonymous. The employee told CNBC the probe “will likely reshape the company fundamentally.”
That reasoning aligns with a Fortune report this month concerning the departures of Binance’s general counsel, senior vice president for compliance and chief strategy officer.
The latter two, however — compliance exec Steven Christie and strategy chief Patrick Hillmann — cited family reasons for their respective exits.
“It’s true that I am leaving @Binance, but I’m doing so on good terms,” Hillmann tweeted. “My wife is literally going to give birth to our second child any hour now (literally), so the time is right for me to step aside.”
Christie, meanwhile, told The Wall Street Journal: “The executive leadership team at Binance has invested more into compliance, the people, and the technology than anywhere I have ever worked, or even heard of in my career.”
A DOJ investigation of Binance would mean at least three concurrent investigations of the exchange by U.S. government agencies. The Commodity Futures Trading Commission sued the firm and its CEO in March for operating an “intentionally opaque” enterprise in violation of the Commodity Exchange Act; and the Securities and Exchange charged Zhao, Binance and Binance.US last month with 13 securities laws violations.
The SEC alleged that although both Binance and Zhao said U.S.-based customers were prohibited from transacting on Binance.com, high-value U.S. customers were allowed to continue trading on the platform; and that Binance.US’s operations were controlled by Zhao despite claims that it operated independently.
In the face of the reported layoffs and regulatory actions against the company, Binance celebrated its sixth anniversary of operations Friday.
“[W]e can't wait for what lies ahead,” the company tweeted.
