Binance.US COO reveals the consequences the SEC’s lawsuit had on the exchange
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In a new court filing, Chief Operating Officer (COO) of Binance.US, Christopher Blodgett, shared the difficulties that the exchange had gone through since the US Securities and Exchange Commission (SEC) filed its lawsuit against Binance last June. According to Blodgett’s statement, the exchange saw a 75% drop in revenue, which led to massive layoffs.
Binance laid off over 200 people following the lawsuit
Binance.US’ COO stated that the exchange had to reduce its workforce by roughly two-thirds, laying off more than 200 employees. He also stressed that Binance.US was not involved with any actual wrongdoing, despite the adverse effects of the regulator’s legal actions against it.
Blodgett also highlighted that the lawsuit had a dramatic impact on the platform’s trading volumes and its business operations overall, explaining that Binance.US lost over $1 billion in crypto and fiat assets. This happened immediately after the SEC’s temporary restraining order.
Furthermore, the court document said that the US branch of the global exchange encountered challenges that go beyond financial losses. Its customers stopped trusting it, and it was difficult for the exchange to secure new banking partners due to concerns involving regulatory scrutiny.
Binance.US refutes SEC’s allegations of failing to cooperate
In its lawsuit, the SEC claimed that Binance.US did not cooperate in providing essential information regarding the custody of customer assets, alleging an impasse in the investigation. Furthermore, the regulator’s lawyers asserted that BAM Trading Services, under which Binance.US operated, refused to comply with basic discovery obligations. According to them, this hindered the investigation.
Binance.US refuted these allegations, claiming that it was compliant with all of the regulator’s requests for information. More than that, the exchange said that it had “gone above and beyond” in its attempts to cooperate.
One of the requests that the SEC has put before Binance is for exchange’s former CEO, Changpeng Zhao, to resign from the position of chairman of the board for Binance.US. He was also ordered to distance himself from the governance of the American division of the exchange.
Later, Zhao also reached a $4.3 billion settlement with the US Department of Justice, pleading guilty to money laundering charges. His criminal sentencing hearing is scheduled for April 3 of this year, and experts believe that he could receive up to 18 months in prison.
Meanwhile, through a proxy agreement, Zhao transferred his voting rights, which changed his role in Binance.US. His role now is one of purely economic interest, with no governance influence whatsoever.
