- According to former employees and internal company messages, Binance halted some employee benefits on June 19th.
- Binance CEO Changpeng “CZ” Zhao stated in a company meeting on Friday that the recent lawsuit filed by the U.S. Securities and Exchange Commission (SEC) did not affect the employees.
- Zhao mentioned that there could be layoffs every three to six months and that he didn’t know when the cut employee benefits would be reinstated.
It has been learned that cryptocurrency exchange Binance has cut some benefits for its employees last month, but the Binance CEO made a contradictory statement about the reason behind this move.
Binance Cuts Employee Benefits
According to former employees and internal company messages seen by WSJ, Binance stopped offering some benefits to employees on June 19th due to the continued decline in the company’s profits. An internal message stated the following:
“Unfortunately, we must be more cautious about our spending, considering the current market environment and regulatory climate that have caused a decline in profits.”
Binance, the world’s largest exchange, will no longer provide benefits such as cell phone reimbursements, gym memberships, and work-from-home expenses to its employees.
However, according to participants in the meeting, Binance CEO Changpeng “CZ” Zhao stated in a company meeting on Friday that Binance is still profitable and unaffected by the lawsuit filed by the U.S. Securities and Exchange Commission (SEC) in recent times. However, he mentioned that there could be layoffs every three to six months and he didn’t know when the cut employee benefits would be reinstated.
In recent weeks, Binance has laid off thousands of employees due to increased regulatory and legal issues worldwide, and it was reported that more than a third of the company’s previous 8,000 employees may eventually be let go.
Zhao denied these figures, stating on Twitter that the media reports were all “very wrong.” He wrote that layoffs happen in every company and it is part of an effort to “increase talent density.”
SEC Pressure Damages Binance’s Reputation
Although not a significant blow, the lawsuit filed by the SEC against Binance and Changpeng Zhao in June has damaged the reputation of the exchange, and it has been confirmed that some senior officials at Binance have resigned.
The SEC also filed a lawsuit against Coinbase, but Coinbase was not as affected as Binance because Coinbase managed to rebuild its institutional trust and continues to dominate the cryptocurrency market in the United States.
The fact that investment giants like BlackRock and Fidelity chose Coinbase as their custodian for spot Bitcoin ETF applications once again emphasizes the institutional trust in Coinbase, and these moves could further strengthen Coinbase’s position. While Binance US is struggling with regulators, Coinbase could strengthen its presence in the United States.
