According to an executive’s testimony in court, the Securities and Exchange Commission (SEC) last year Binance US’s efforts to temporarily freeze its operations led to a decline in the company’s revenue and damage to market confidence, resulting in mass layoffs.
“Immediately following the Temporary Restriction Order (TRO), we saw $1 billion in assets exit the platform, crypto and fiat currencies,” Binance.US manager Christopher Blodgett said during a December 2023 status update.
This $1 billion loss resulted in a 75% loss of revenue and 200 layoffs (equating to two-thirds of employees) across Binance’s US business. This reduction in staff negatively impacted the ability to respond to scouting requests from the SEC as teams were greatly weakened.
Blodgett also said the company’s legal costs had risen to $10 million and auditor expenses had increased “10-fold,” while costs from banks had grown with increasing demands and eventually severing relationships altogether.
“Banks demanded significant increases in collateral after the TRO and eventually terminated the relationship altogether. “As a result, our customers were unable to deposit and withdraw fiat currencies to the platform, effectively undermining the business,” he added.
Since then, the company has struggled to find new banking partners, Blodgett said.
