Brian Shroder, Chief Executive Officer of Binance US, has bid farewell to the crypto trading platform. Confirming his departure, a company representative revealed that Norman Reed, the Chief Legal Officer, will temporarily step into Shroder’s shoes.
Shroder’s journey at Binance’s American division, where he took the helm as President in September 2021, has come to an unexpected end. This exit couldn’t have come at a more challenging juncture for Binance.US, which recently conveyed its plans to slash one-third of its workforce.
The CEO’s departure is intertwined with Binance.US’s strategic downsizing.
The decision to reduce its workforce by more than a third translates to over 100 employees losing their jobs. This substantial downsizing reflects the profound challenges Binance.US currently faces, primarily stemming from intensified government regulations.
Operating under the official name of BAM Trading Services Inc., the company was established in 2019 to cater to users in the United States who couldn’t access Binance Holdings directly.
Notably, this is the second time this year that Binance.US has resorted to job cuts, with Miami being particularly affected. The company finds itself entangled in a web of legal and operational difficulties.
In March, the US Commodity Futures Trading Commission (CFTC) made allegations against Binance and its CEO, Changpeng “CZ” Zhao, accusing them of deliberately evading federal laws. In addition, the Justice Department has initiated an investigation into Binance, although no official accusations have been made against the company yet.
By June, the US Securities and Exchange Commission (SEC) joined the fray, leveling accusations against Binance Holdings, Changpeng Zhao, and Binance.US. These allegations included mishandling of customer funds, misleading actions towards investors and regulators, and violations of securities regulations. Zhao and the companies vehemently denied these allegations.
A company spokesperson stated, “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.”
The fallout from the SEC’s actions reverberated through Binance.US, as customers encountered difficulties depositing or withdrawing US dollars due to many banking partners severing ties with the platform. Consequently, the company had to find alternative means for Binance.US users to convert their dollars into cryptocurrency.
Binance.US’s share of the global cryptocurrency market dwindled from approximately 2.39% in April to around 0.6%, according to Jacob Joseph, an analyst at CCData. Furthermore, the platform’s monthly trading volume has dipped below levels seen in early 2020.
A spokesperson lamented, “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.” The cryptocurrency world now waits with bated breath to see how Binance.US navigates these turbulent waters.