The impact of regulatory challenges on the exchange’s market share has been notable. Binance.US has experienced a substantial decline in its market presence in the United States.
Brian Shroder, the CEO of Binance.US, the American arm of the world’s largest exchange, has resigned from his position as the company grapples with mounting regulatory challenges in the United States.
According to a company spokesperson, Shroder, who assumed the role of CEO in September 2021, will be succeeded on an interim basis by Norman Reed, the company’s Chief Legal Officer.
Binance.US Conducts Another Round of Layoffs
Shroder’s departure was accompanied by another round of layoffs as the company reduced its workforce by one-third, resulting in over 100 job cuts. The exchange, established in 2019 to cater specifically to US users who are restricted from using Binance Holdings, had initially slashed its headcount earlier this year in preparation for its legal battle with the US regulator.
“The actions we are taking today provide Binance.US with more than seven years of financial runway and enable us to continue to serve our customers while we operate as a crypto-only exchange,” revealed the company.
Despite being established for the US market only, the company’s journey in the United States has been fraught with legal troubles and regulatory scrutiny, particularly from the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
In March, the CFTC brought legal charges against Binance and its founder Changpeng Zhao (CZ) for ‘wilful evasion of federal law’. Simultaneously, the US Department of Justice (DOJ) initiated an investigation into Binance, however, it has not yet made any formal allegations of misconduct against the company.
Later in June, the SEC sued Binance.US, its parent company Binance Holdings, and its founder Zhao with allegations of operating an illegal exchange, selling unregistered securities, violating securities laws, and mishandling customer funds.
SEC’s Legal Dispute with Binance.US Could Impact American Jobs
A Binance.US spokesperson commented on the impact of the SEC’s actions on the broader crypto industry, stating that:
“The SEC’s aggressive attempts to cripple our industry and the resulting impacts on our business have real-world consequences for American jobs and innovation, and this is an unfortunate example of that.”
In light of these developments, CZ has taken to social media, dismissing negative news and rumors about the company while highlighting its accomplishments in 2023.
Impact of Regulatory Crackdown on Binance.US
The impact of regulatory challenges on the exchange’s market share has been notable. Binance.US has experienced a substantial decline in its market presence in the United States. Data from Kaiko in July showed that the company’s market share plunged from approximately 22% in April to a mere 0.9% by the end of June.
Shortly after the SEC’s lawsuit, the exchange halted dollar deposits and informed its customers that it would temporarily cease fiat withdrawal options due to its ongoing regulatory dispute with the SEC.
Binance.US operated as a crypto-only exchange for two months without USD transactions. However, it reintroduced USD support in August through a partnership with MoonPay.