The crackdown on crypto firms by the United States Securities and Exchange Commission (SEC) appears to have severely affected Binance’s business. During the past few weeks, the crypto exchange reportedly fired over 1,000 employees and slashed some benefits.
According to Binance, the “current market environment and regulatory climate” have caused a decline in profits, suggesting more cuts may be in the works. A spokesperson told Cointelegraph the firm would consider scaling back on “certain products, business units, staff benefits and policies” in response to business and regulatory concerns.
Binance has yet to face the courts and the 13 charges brought against it by the SEC, as well as the outcome of an investigation by the U.S. Justice Department targeting its activities and executives.
Despite cloudy prospects ahead, Binance is still comfortably the most popular centralized crypto exchange in the world, holding assets worth over $63 billion. A token breakdown by DefiLlama shows that the majority of assets held in Binance include Tether (USDT) (27.55%), Bitcoin (BTC) (26.95%), BNB (BNB) (12.82%), and wrapped Ether (10.08%).
In remarks on Binance’s anniversary on July 14, the exchange’s CEO Changpeng Zhao recalled that the company’s journey was “never all smooth sailing.”
This week’s Crypto Biz looks at Binance’s ongoing efforts to curb declining profits, Ripple’s expectation that U.S. banks may soon adopt XRP (XRP) and the first signs of venture capital returning to crypto.
Ripple CLO says court ruling could encourage banks to adopt XRP
Stu Alderoty, chief legal officer of Ripple Labs, believes that U.S.-based banks may turn to XRP for cross-border transactions following a recent court ruling. “Hopefully, this quarter will generate a lot of conversations in the United States with customers, and hopefully, some of those conversations will actually turn into real business,” he said during an interview. With the label of “security” seemingly no longer hanging over XRP, partnerships between Ripple and banks dampened by the SEC lawsuit could find new life. Bank of America had been eyeing the blockchain firm in 2019, and American Express first partnered with Ripple in 2017.
#NEW: Chairmen @PatrickMcHenry and @CongressmanGT issue a statement regarding the court ruling in SEC v. Ripple and the need for legislative clarity in the digital asset ecosystem to prevent further uncertainty in our financial markets.
Read more https://t.co/y1nITVmHvh pic.twitter.com/tn0dn0BDHd
— Financial Services GOP (@FinancialCmte) July 14, 2023
Binance cuts back on employee benefits, citing ‘decline in profit’
Global cryptocurrency exchange Binance is cutting back on certain employee benefits amid reevaluation efforts at the firm. The company reportedly stopped offering reimbursement to employees for certain expenses, including using mobile phones, fitness and working from home. Binance cited the “current market environment and regulatory climate,” which led to a decline in profit, suggesting more cost-cutting measures may be needed. The report follows a massive layoff in June that affected over 1,000 employees in the exchange. Binance and Zhao were both targeted in suits by the SEC for allegedly offering unregistered securities in the United States.
Marathon shareholders file lawsuit against company’s top management
Crypto mining company Marathon Digital is heading to court over allegations that its CEO Fred Thiel, alongside other top executives, breached fiduciary duties, unjustly enriched themselves and wasted corporate assets. According to the complaint, the company’s management has been downplaying its problems, artificially inflating Marathon’s valuation, receiving excessive compensation, making lucrative insider sales, and receiving unjustifiably elevated bonuses based on false and misleading statements.
Polychain Capital, Coinfund raise $350 million for new crypto funds
Web3 venture firms are gearing up for new investments in crypto projects as Polychain Capital raised $200 million for a new investment fund and Coinfund secured $152 million for a seed fund. Polychain still intends to raise $400 million in total for the new fund. It currently operates three funds with approximately $2.6 billion in assets under management. As for Coinfund, its CEO Jake Brukhman said the company set a goal of raising $125 million but managed to rake in an additional $27 million due to a resurgence of interest in the industry. The total volume of venture funding for crypto startups has declined by 76% from year-over-year due to the bear market and turbulence in the industry.
July is CoinFund’s 8th anniversary, celebrating the journey of @jbrukh @flexthought and team from kitchen table to cap table. We’re thrilled to bolster this milestone with the announcement that CoinFund has closed its $158M Seed IV Fund to back the leaders of the new internet
pic.twitter.com/6kwBFuIHiy— CoinFund (@coinfund_io) July 18, 2023
Before you go: Bitcoin rally will lead to “speculative blow-off top” in 2024, Mark Yusko predicts
BlackRock’s application for a spot Bitcoin exchange-traded fund has sparked the beginning of a new crypto bull market, which will go parabolic at some point closer to the halving scheduled for April 2024, according to Mark Yusko, the chief investment officer and founder of Morgan Creek Capital.
Crypto Biz is your weekly pulse of the business behind blockchain and crypto, delivered directly to your inbox every Thursday.
