The Securities and Exchange Commission hit Binance with a massive lawsuit in June of this year, and not long after, the U.S. arm of the leading crypto exchange “imploded,” according to new court documents filed on Tuesday.
In a deposition from December that was released on Tuesday, Binance.US COO Christopher Blodgett revealed that the company has been forced to lay off more than 200 employees, or two-thirds of its workforce, since June as a result of the SEC’s action.
“Our trading volumes and business more generally have imploded,” Blodgett said in the deposition, noting that revenues for the trading platform fell around 75% after the SEC sought a restraining order in June to freeze assets.
‘Web of deception’
In the June lawsuit, the SEC filed 13 charges against Binance, accusing the exchange of mishandling customer funds and offering registered securities, alleging that the company and founder Changpeng Zhao had engaged in an “extensive web of deception.”
The lawsuit targeted not only the global company but also its U.S. arm, which operates under an entity called BAM Trading. In separate legal complaints, both the SEC and the Justice Department claimed Binance.US—which Binance had complained was independent—had engaged in so-called wash trading in collusion with its parent company to artificially inflate volume on the platform.
In November, Binance settled charges with the Justice Department, the Treasury Department, and the Commodity Futures Trading Commission, agreeing to a $4.3 billion settlement, although the SEC was conspicuously absent from the agreement. Binance agreed to a complete exit from the U.S. as part of the settlement, although an official said that BAM Trading was not affected by the agreement.
The SEC lawsuit, which involves broader allegations of fraud, is ongoing, with Binance seeking to dismiss the suit in a motion that was argued before a D.C. federal judge in January.
As part of the SEC’s enforcement action, it took the extraordinary step of seeking to freeze the U.S. trading platform’s assets, arguing that Zhao could remove the funds from the exchange. A judge rebuffed the request in June, although it still significantly hurt Binance.US’s business, according to Blodgett’s deposition.
In the filing, he described the lawsuit and restraining order as a “near-mortal blow,” impairing the platform’s ability to find partners, including banks and market makers, which reduced from more than 20 to less than five in the months following the lawsuit. In August, Binance.US turned to the crypto startup MoonPay as an alternative way for users to convert dollars to crypto after losing its banking partners. The downturn coincided with broader chills throughout the crypto market, with trading and prices sharply decreasing after the collapse of high-profile companies like FTX in 2022.
Binance.US previously reported that it had laid off 100 staff in September, with CEO Brian Shroder leaving the company. A sentencing hearing for Zhao related to the DOJ settlement has been scheduled for April.
A spokesperson did not immediately respond to a request for comment.
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FAQs
The U.S. Securities and Exchange Commission's lawsuit against Binance.US last June had forced the company to cut over 200 employees, or two-thirds of its staff, after a 75% decline in revenue, a Binance.US executive said, according to a new court document released on Tuesday.
How to get cash out of Binance US? ›
On the web
- Click Wallet in the top menu bar.
- Click Withdraw.
- Select US Dollar from the list.
- If you need to add a payment method, select Add Payment Method, then Bank Transfer. ...
- Select your ACH account, enter the withdrawal amount, and click Preview Withdrawal.
The narrative
An appeals court revived a putative class-action lawsuit filed by a group of crypto investors against Binance last week, ruling that a district judge had erred in dismissing the case as being filed in the wrong jurisdiction and after the statute of limitations had expired.
Why was Binance banned in Nigeria? ›
Binance, accused of manipulating the foreign exchange rate, is facing five-count charges in the High Court. Less than five years after integrating Nigeria's local currency onto its platform, Binance ended its naira services last month following a government crackdown that led to the arrest of two of its executives.
How much money is held on Binance? ›
The $100 Billion Milestone: A Closer Look
Aggregate USD value of digital assets held by Binance, November 2022-March 2024.
Can I get my money out of Binance? ›
If you've decided to withdraw your cryptocurrencies from Binance to store them securely in a personal wallet or use them elsewhere, follow these steps: Log in to Binance: Access your Binance account. Go to Wallet: From the menu, select “Wallet.” Click on “Withdraw”: Select “Withdraw” from the menu.
Why can't i cash out on Binance? ›
Important: Binance.US No Longer Supports Direct Dollar Withdrawals. Binance.US has updated its withdrawal policies; now users must convert U.S. dollars to crypto before withdrawing.
Why was Binance banned in the US? ›
It has been alleged that Binance could be used as a funding mechanism for terrorist groups. In November 2023, the company pleaded guilty in a U.S. federal court to money laundering, unlicensed money transmitting, and sanctions violations.
What is the settlement for the Binance lawsuit? ›
In November, Binance settled charges with the Justice Department, the Treasury Department, and the Commodity Futures Trading Commission, agreeing to a $4.3 billion settlement, although the SEC was conspicuously absent from the agreement.
Can I get my money back if I got scammed from Binance? ›
It is possible to recover funds after being scammed, hacked, or losing coins on Binance. However, it is not always possible to recover all of the lost funds, and the process can be complicated and time-consuming.
Here's a list of countries whose traders are banned from trading on Binance:
- Ontario (Canada)
- China.
- Europe (for derivatives trading)
- Malaysia.
- Japan.
- UK.
- Thailand.
- #TrendingTopic #BTC.
Binance has recently come under the scrutiny of the Federal Government, facing allegations of money laundering, illegal operations, financial terrorism, and tax evasion, among other concerns.
Where was Binance banned? ›
March 5 (Reuters) - Binance will stop all transactions and trading in Nigeria's local currency after March 8 amid a country-wide crackdown on crypto exchanges that have been blamed by authorities for feeding a black market for foreign exchange.
Is Binance going to survive? ›
In many ways, Binance got off easy. It has to pay a massive penalty, yes, but it looks like it has money on the books to survive. Binance will also need to appoint an independent monitor and send compliance reports to the U.S. government.
What is the downfall of Binance? ›
Binance, which is one of the world's largest cryptocurrency exchanges, is now seeing its downfall in India after the government decided to block its URLs in the country due to non-compliance with government norms.
Which country most uses Binance? ›
Here are the top 10 countries with the most Binance users. India Russian Federation Turkey United States Vietnam Pakistan Ukraine Kenya Nigeria Argentina These countries are home to a large number of crypto enthusiasts and investors, and they have been some of the earliest adopters of cryptocurrencies.
How do you convert Binance to cash? ›
To get started, you need to have a Binance account on and complete KYC verification.
- Set up your ad. Choose your preferred payment method, currency and the amount of bitcoin you are planning to sell.
- Place an order. ...
- Confirm the payment. ...
- Release your crypto.
First, navigate to the fiat and spot page on the Binance website, where you'll find your fiat balance. Select the currency you wish to withdraw, and choose the bank transfer option from the drop-down menu. Enter the required bank account details and confirm the amount you want to withdraw.
What happens if I use Binance in the US? ›
However, Binance.US is not supported in all US states, so if you're traveling to Hawaii or Texas, for example, you won't be able to use your account. Binance checks your IP address to see where you're located. With a VPN you can change your IP address to the US state you used to sign-up for an account.
Can I transfer from Binance.US to Coinbase? ›
To transfer cryptocurrency from Binance US to Coinbase Pro, you will need to generate a deposit address on Coinbase Pro and then copy it. Next, you will need to navigate to the "Withdraw" page on Binance US and select the cryptocurrency you wish to transfer.
