As regulatory scrutiny from the United States escalates, cryptocurrency exchange Binance has been hit by a wave of internal turmoil. The company has seen an exodus of key executives, including its general counsel, chief strategy officer, investigations director, and senior vice president in charge of compliance over the last few weeks. Binance also conducted a series of layoffs last week, planning to decrease its U.S. workforce to limit its exposure in the country.
Sources indicate that Binance's general counsel, who also served as personal lawyer to CEO Changpeng Zhao, Hon Ng, was forced out of the company recently due to disagreements with Zhao. Eleanor Hughes, the legal director for Binance's Asia Pacific, Middle East, and North Africa operations, has taken Ng's position, returning to the company after a brief departure. Two other Binance lawyers also resigned recently.
Matthew Price, Binance's global investigations and intelligence director, confirmed his recent departure from Binance in a message last Friday, leaving for a role at another company. Price, a former cybercrime investigator for the U.S. Internal Revenue Service, was in charge of coordinating Binance's relationships with law enforcement agencies around the world.
Patrick Hillmann, Binance's chief strategy officer, expressed on Twitter last Thursday that after two years of relentless work, industry crises, and regulatory challenges, it was time for him to leave the company.
Early Friday, Steven Christie, the senior vice president in charge of compliance at Binance, said he was feeling burnt out and wished for more time with his family. He added that Binance's executive leadership team's investments in compliance, staff, and technology were more substantial than anywhere else he had ever worked or even heard of during his professional career.
Founded by Changpeng Zhao in 2017, Binance faced the increasing crackdown on cryptocurrencies in the U.S. in early 2019. In response, Zhao established Binance.US, a separate U.S. exchange, aiming to appease U.S. regulators and protect Binance's global operations from U.S. enforcement.
Binance.com has a global workforce of 8,000, with around 150 employees in the U.S. Binance.US has approximately 500 employees, and recently laid off about 50, equivalent to 10% of its total workforce. The 8,000 employees of Binance.com do not include the staff of Binance.US.
Binance recently decided to reduce its exposure to U.S. operations by firing or reassigning U.S. employees. The plan is currently being implemented. Employees let go last week discovered 15-minute human resources meetings on their calendars, with no explanations or warnings. They were not informed about the number of people being laid off. Binance's website currently does not list any open positions in the U.S.
In regard to Binance's personnel turbulence, Zhao said, "As the cryptocurrency market and global environment evolve, as our organization grows, and as individual situations change, every company will experience staff turnover."
Previously, media reported that the U.S. Department of Justice was investigating Binance for its lack of anti-money laundering controls. In recent months, Binance has been in talks with the U.S. Securities and Exchange Commission (SEC) and the Department of Justice, hoping to reach a settlement.
However, in June of this year, the SEC unexpectedly sued Zhao, Binance, and its U.S. exchange, accusing Binance of operating an illegal trading platform and abusing customer funds in the U.S. The SEC requested a global freeze of Binance's U.S. platform assets. The mood within Binance turned gloomy after the SEC's lawsuit, seen as a critical turning point. Media reports suggested increasing concerns among Binance executives that the U.S. Department of Justice could bring charges against the company and Zhao.
Former employees revealed that Zhao had consistently refused to relinquish control of the company or resign, despite many within the company believing his stay could jeopardize Binance's survival. Currently, Binance's executives are working hard to maintain the company's reputation and resolve disputes with regulators, but their efforts could be in vain and cause disappointment if the U.S. Department of Justice brings criminal charges against Binance and Zhao.
Zhao spends most of his time at his home in Dubai, a location without an extradition treaty with the U.S.
Over the last few months, Binance's market share has declined, but it remains the world's largest cryptocurrency platform.
