Binance.US, a reportedly independent subsidiary of crypto giant Binance, is grappling with a series of setbacks that have prompted significant changes within the organization. The latest shock exit of CEO Brian Shroder comes at a time of turbulent waters, marked by regulatory crackdowns and operational hurdles.
In a landscape fraught with challenges, Binance.US earlier made the tough decision to cut down its workforce by approximately one-third or eliminate over 100 positions. The downsizing is the second round of job cuts within the firm in 2023. This move is attributed to the regulatory headwinds that have disrupted the company’s business operations.
Both SEC and CFTC have hammered the firm alleging violation of law. In June, the U.S. Securities and Exchange Commission [SEC] accused the firm of customer fund mishandling, misleading investors and regulators, and violating securities rules against Binance Holdings, Zhao, and Binance.US. Both Zhao and the companies have vehemently denied these accusations.
Earlier, in March, the U.S. Commodity Futures Trading Commission [CFTC] also charged the exchange and Zhao with “willful evasion of federal law.” Additionally, the U.S. Department of Justice is conducting an investigation into the firm, although no formal charges have been filed against the company to date.
The effect of these legal actions has been substantial. Shortly after the SEC’s allegations, Binance.US users were unable to deposit or withdraw dollars, due to multiple banking partners severing ties with the platform. The trading platform was compelled to explore alternative methods to facilitate the conversion of dollars into cryptocurrencies for its users.
Further Binance.US’s market share shrunk from around 2.39% in April to a mere 0.6%. Monthly trading volume has dwindled to levels below those seen in early 2020, according to Jacob Joseph, an analyst at researcher CCData.
Binance.US Lay Off To Extend Cash Runaway
In response to these adverse circumstances, a spokesperson for Binance.US conveyed that the recent actions were taken to provide the organization with a substantial financial runway, allowing it to operate as a crypto-only exchange. The spokesperson also highlighted the SEC’s aggressive stance and its implications on the industry, citing it as a factor in these challenging times.
The departure of CEO Brooks Shroder, who joined Binance.US two years ago, adds to the organization’s evolving leadership dynamics. Shroder, with an extensive background in business development and strategy, held key positions at Ant Group and Uber before joining the firm. His appointment followed the departure of the previous CEO, Brian Brooks, who exited the role after just four months.