The crackdown on crypto firms by the US Securities and Exchange Commission (SEC) seems to be significantly affecting Binance’s business. Over the past few weeks, the crypto exchange has reportedly laid off more than 1,000 employees and cut some benefits.
According to Binance, the “current market environment and regulatory climate” has led to a decline in profits, suggesting that more cuts may be in the works. A spokesperson told Cointelegraph that the company would consider reducing “certain products, business units, employee 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 US Department of Justice targeting its activities and executives.
Despite dim prospects ahead, Binance is still comfortably the most popular centralized crypto exchange in the world, holding assets worth over $63 billion. DefiLlama casting breakdown 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 “has never been entirely smooth sailing.”
This week Crypto Biz takes a look at Binance’s continued efforts to stem declining profits, Ripple’s expectation that US banks will 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 US banks may turn to XRP for cross-border transactions after a recent court ruling. “Hopefully, this quarter will generate a lot of conversations in the U.S. with customers, and hopefully, some of those conversations will actually turn into real business,” he said during an interview. With the label of “security” apparently no longer hanging over XRP, partnerships between Ripple and banks weakened by the SEC lawsuit could find new life. Bank of America looked at the blockchain company in 2019, and American Express first partnered with Ripple in 2017.
#NEW: Presidents @PatrickMcHenry and @KongresanoGT issue a statement on 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.
— GOP Financial Services (@FinancialCmte) July 14, 2023
Binance cuts employee benefits, citing ‘decline in profitability’
Global cryptocurrency exchange Binance is cutting certain employee benefits amid reevaluation efforts at the company. The company reportedly stopped offering reimbursement to employees for certain expenses, including cell phone use, fitness and working from home. Binance cited the “current market environment and regulatory climate” that led to a decline in profitability, suggesting that more cost-cutting measures may be needed. The report follows a mass layoff in June that affected more than 1,000 employees on 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 a lawsuit against the company’s top management
Crypto mining company Marathon Digital is headed to court over allegations that its CEO Fred Thiel, along with other top executives, breached fiduciary duties, unjustly enriched himself and squandered company assets. According to the complaint, the company’s management downplayed its problems, artificially inflating Marathon’s valuation, receiving excessive compensation, making lucrative inside sales and receiving unjustifiably inflated bonuses based on false and misleading statements.
Polychain Capital, Coinfund raises $350 million for new crypto funds
Web3 venture firms are preparing 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 raise an additional $27 million due to a resurgence of interest in the industry. The total volume of venture funding for crypto startups has decreased by 76% year over year due to the bear market and turbulence in the industry.
July is CoinFund’s 8th anniversary, celebrating the journey of @jbrukh @flexapense and a team from kitchen table to head table. We are pleased to reinforce this milestone with the announcement that CoinFund has closed its $158M Seed IV Fund to support the leaders of the new internet.
— CoinFund (@coinfund_io) July 18, 2023
Before you go: Bitcoin rally will lead to ‘speculative boom’ in 2024, predicts Mark Yusko.
BlackRock’s request for a spot Bitcoin exchange-traded fund sparked the start of a new crypto bull market that 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.
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