Binance US, the United States offshoot of the international cryptocurrency exchange, is facing a precipitous 70% drop in revenue this year. This downturn comes in the wake of several legal battles and internal issues plaguing the company.
What Happened: A Wall Street Journal report on Monday revealed that both Binance and its US subsidiary have been grappling with layoffs and executive exits. The companies are reportedly under scrutiny from the Department of Justice (DOJ) and are also contending with a lawsuit from the Securities and Exchange Commission (SEC).
Earlier, the Wall Street Journal had reported on an ongoing DOJ investigation that might culminate in criminal charges against both Binance and its CEO, Changpeng Zhao.
In June, the SEC lodged a lawsuit against the crypto exchange, alleging violations of securities laws and misuse of customer funds, allegations that Binance has since refuted.
See Also: Crypto Expert Warns Of $440 Billion Wipeout, Shares Concerning Prediction About Bitcoin
Before stepping down, former Binance.US CEO Brian Shorder noted the significant revenue decline and suggested that Zhao either sell his Binance.US shares or transfer his assets into a blind trust. There were also talks of Zhao relinquishing his leadership role at Binance.
"As a fast-growing company in a nascent, complex industry, Binance's evolution has not been free of mistakes… we have worked tirelessly not just to learn the lessons of the past, but also to continue to invest in the teams and systems that ensure user protection," a Binance spokesperson told Blockworks.
Why It Matters: Binance has been facing increasing regulatory pressure globally. This has led to the company ceasing operations in certain regions and facing scrutiny in others.
The current legal challenges and revenue dip could significantly impact Binance’s operations and future growth.
Photo by Iryna Budanova on Shutterstock
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