Binance.US, a leading cryptocurrency exchange, has faced significant operational strain following legal scrutiny by the U.S. Securities and Exchange Commission (SEC). The exchange’s Chief Operating Officer, Christopher Blodgett, revealed in a recent court deposition that subsequent to the SEC’s lawsuit in June, critical banking partnerships have dissolved. This development has placed the company in a precarious position, as described by Blodgett: “To banks, we’re radioactive.”
The legal action, which accused Binance.US and its founder of offering unregistered securities among other infractions, prompted an exodus of approximately $1 billion in assets from the platform. The financial impact was stark, with a reported 75% revenue plummet, leading to the unfortunate termination of over two-thirds of its workforce, affecting more than 200 employees.
The SEC’s firm stance has not only affected Binance.US’s liquidity but also its standing with market makers, reducing its collaborators from over 20 to less than five. Despite settling related violations with other regulatory bodies for a hefty $4.3 billion, the SEC persists in its legal battle, with further evidence being sought against the exchange.
Amidst these challenges, the company’s founder, Changpeng “CZ” Zhao, has acknowledged money laundering charges with a sentencing hearing scheduled for April 3, facing a potential 18-month incarceration.
