Binance Unravels as Executives Flee and Layoffs Proliferate

Binance is in retreat, as the pressure from federal investigations builds. 

The firm’s general counsel, chief strategy officer, head of investigations and a senior vice president for compliance, among others, departed in recent weeks, a sign of the turmoil rattling the largest crypto exchange.

In addition, Binance laid off dozens of staffers last week. Some employees weren’t given a reason while others were told they had been made redundant. The exchange has a plan to cut U.S.-based personnel.

Binance founder Changpeng Zhao dismissed the idea that the resignations are a sign of internal tumult. 

“As markets and the global environment for crypto changes, as our organization evolves, and as personal situations change, there is turnover at every company,” he said in a post on Twitter.

This article is based on interviews with current and former Binance executives and employees and court documents. 

Inside Binance, executives have grown worried the Justice Department will file charges against the firm and Zhao. Zhao has resisted giving up control of the company or stepping aside, though many inside the firm believe his staying could put Binance’s survival into question, one former employee said. 

The Justice Department is probing whether Binance failed to implement controls to prevent money laundering, The Wall Street Journal previously reported.

Part of the frustration at the firm is that executives were working hard to clean Binance’s reputation and resolve disputes with law enforcement authorities, but that effort could be undone if the Justice Department files criminal charges against the company and Zhao, according to the former employee. 

Binance had been in discussions with staff from the Securities and Exchange Commission and the Justice Department hoping for a settlement for months. But in June, the SEC sued Zhao, Binance and its U.S. exchange, alleging Binance operated an illegal trading platform in the U.S. and misused customers’ funds. 

Executives were surprised when the SEC dropped talks and chose to file a lawsuit against the company and Zhao instead. Since then, the mood inside the exchange has turned gloomy. Zhao has mostly stayed put in his home in Dubai, which doesn’t have a mutual extradition treaty with the U.S.

Binance’s market share has declined in recent months, though it remains by far the largest global crypto platform. 

Hon Ng, Binance’s general counsel, who also served as Zhao’s personal attorney, was recently forced out of the company because of disagreements with Zhao, people familiar with his exit said. Ng didn’t reply to requests for comment.

Matthew Price, Binance’s global head of investigations and intelligence, confirmed in a message Friday that he left the company in recent weeks for a position with another firm. Price is a former cybercrimes investigator for the Internal Revenue Service who coordinated Binance’s relationships with law enforcement agencies around the world. 

Patrick Hillmann, Binance’s chief strategy officer, said on Twitter on Thursday that it was time to leave after working nonstop for two years, taking it “through a lifetime of industry crises and regulatory challenges.”

Steven Christie, the senior vice president for compliance, said early Friday that he was tired and wanted more time with his family.

“The executive leadership team at Binance has invested more into compliance, the people, and the technology than anywhere I have ever worked, or even heard of in my career,” Christie said. 

Zhao founded Binance in 2017, soliciting users in dozens of languages and countries through a global website without conducting checks that other financial firms are required to make, such as asking users for their addresses, proof of identity and where funds came from. Not conducting the checks, which are intended to deter illicit finance, allowed Binance to grow rapidly, drawing the attention of regulators globally.

In early 2019, as the U.S. began a crackdown on crypto, Zhao created a U.S. exchange designed to appease American regulators. The exchange, Binance.US, would also shield Binance’s global operations from U.S. enforcement, former executives hoped. 

Binance.com had about 150 people in the U.S. out of a global staff of 8,000. Its global staff doesn’t include the staff of Binance’s American exchange. Binance.US, too, has recently laid off staff: around 50 people, or 10% of its workforce. 

Binance recently decided to cut exposure to the U.S. by firing or relocating U.S.-based staff as part of a plan to shield the exchange. That plan is currently in motion. 

U.S.-based employees who were laid off last week said that they found meetings on their calendars with human resources for 15-minute slots without reason or warning. Employees weren’t told the full scope of how many people were terminated, they said.

In attempting to recruit a U.S.-based person for a job this week, a Binance employee said the job would be based outside the U.S. and asked if the candidate would be open to relocating. Binance’s website currently lists no postings based in the U.S.

Write to Patricia Kowsmann at [email protected], Dave Michaels at [email protected], Caitlin Ostroff at [email protected] and Vicky Ge Huang at [email protected]