• WSJ reports that Binance and its CEO Changpeng Zhao could be facing criminal charges.
• An analyst calls for calm and says another exchange would certainly take over as this situation is not new. 

The woes of Binance continue as the Wall Street Journal discloses that the exchange could face criminal charges. Recently, the US Securities and Exchange Commission charged the exchange and its CEO Changpeng Zhao for commingling billions of dollars of customers’ funds. It was also alleged that Zhao and the Exchange assisted US high-net-worth investors in subverting controls to access the platform. Criminal charges could be an extension of its woes after losing more than a dozen senior executives in the past three months. The “general counsel, chief strategy officer, head of investigations, and a senior vice president for compliance” have all left the company.

The Exchange Could Lose More Workers

The Justice Department is reportedly investigating whether the exchange failed to implement measures to prevent money laundering. 

According to reports, many people inside the firm believe that the decision of CZ to stay could put Binance’s survival in doubt. Binance was actively in touch with the staff of the SEC and the Justice Department, hoping for a possible settlement. However, the conversation suddenly dropped and the exchange was sued. A person familiar with the company also disclosed that more than 1,000 employees have been laid off. At this rate, Binance can lose a third of its staff. 

A Binance spokesperson said:

As we prepare for the next major bull cycle, it has become clear that we need to focus on talent density across the organization to ensure we remain nimble and dynamic. This is not a case of rightsizing, but rather, re-evaluating whether we have the right talent and expertise in critical roles.

Binance Co-Founder Certain of Sailing Through

Binance.US CEO Brian Shroder has stated that revenue is down by 70 percent from year to date. According to him, CZ would first have to find a solution to the US regulatory issues, put his US holdings in a blind trust, or sell his shares to get the company back on track. 

The series of unfortunate events has created fear that the exchange could be the next FTX, however, Yi He, Binance’s co-founder and chief marketing officer has assured all stakeholders in an internal message that they would surely overcome the troubles. 

Every battle is a do-or-die situation, and the only thing that can defeat us is ourselves. We have won countless times, and we need to win this time as well.

A spokesperson of Binance has also said that they have worked tirelessly to both take a cue from the past and continue to invest in the team and systems to ensure that users are protected. Many believe that the current happenings around Binance and its CEO could have a huge implication on the crypto industry. However, some industry players believe that another exchange would take over. Regardless, a short-term effect on liquidity and a sharp price fall is imminent. WSJ has stated that one institutional trader is planning to withdraw assets from Binance to avoid any loss in a meltdown. 

Anthony Georgiades, a general partner at Innovating Capital commented on this:

You just can’t quantify what would happen to the industry if Binance disappeared, given it has been responsible for fostering a huge amount of innovation and growth.

Regardless, the crypto market is always prepared to get back in shape.