Key Takeaways:
- Binance.US CEO Brian Shroder has become the latest executive to leave the company.
- The latest actions against Binance raise fears that it may collapse like FTX.
- BNB, the native token of Binance, remains under the $220 mark
YEREVAN (CoinChapter.com) — Binance.US CEO Brian Shroder has stepped down from his position, with Norman Reed, the Chief Legal Officer at the firm, temporarily succeeding him.
The recent developments have instigated fears among traders that the crypto exchange will collapse. A subsequent folding of its de-facto parent firm, Binance Holding Ltd., could become the next major debacle after FTX.
The company has recently undergone a significant restructuring, resulting in the departure of approximately 100 employees, representing about one-third of its workforce. Shroder joined Binance.US in September 2021.
His departure and the wider organizational changes have occurred amid an ongoing lawsuit that Binance.US is facing from the US Government Agencies.
Binance, the parent company, has also seen a mass exodus recently. Earlier this month, Global Product Lead Mayur Kamat left the firm.
Kamat departed after Chief Strategy Officer Patrick Hillmann and Senior Director of Investigations Matthew Price quit. Binance SVP for Compliance Steven Christie and Asia-Pacific Head Leon Foong have already left.
Meanwhile, BNB, the native token of the exchange, continues to tank. In June 2023, the token’s price fell below the $300 mark. The last time it slipped below that mark was in March this year.
When writing, BNB exchanges hands at $211, over 35% below its price six months ago. Although most of the troubles evolve around Binance.US, the implications will also spill over to the main exchange.
Binance caught in lawsuits with the SEC & CFTC
In March this year, the Commodity Futures Trading Commission (CFTC) filed lawsuits against Binance, Binance.US, and the exchange’s co-founder, Changpeng “CZ” Zhao. These legal actions accused them of operating an illicit exchange, selling unregistered securities, infringing upon commodities regulations, and mishandling customer funds.
In June, the Securities and Exchange Commission (SEC) also initiated a lawsuit against Binance and its CEO, accusing them of violating US securities laws.
Binance (BNB) is also facing an investigation from the US Department of Justice (DOJ). According to John Reed Stark, author and former chief of SEC’s Office of Internet Enforcement (OIE), the DOJ might be planning to file a criminal indictment related to Binance.
If these serious criminal charges stick, CZ could be in deep trouble. The crypto exchange is also under the scanner in France, The Netherlands, and Australia. Several EU countries, including Germany and Belgium, have also tightened their stance against Binance.
Binance.US CEO Norman Reed’s departure comes when the firm is gearing up to fight the allegations in court. A part of its strategy is to put together a stellar defense team.
Notably, the company has signed up George Canellos, the global head of litigation and arbitration group at Milbank LLP. Canellos previously served as the SEC’s Deputy Director of the Division of Enforcement and Director of the SEC’s New York regional office.
Is Binance the next FTX?
The recent developments in Binance have investors worried. The markets have not recovered from the mayhem that Sam Bankman-Fried’s FTX caused after it went bankrupt.
At the time, nobody would have ever thought that the exchange would fold up so dangerously. But it did. Now, Binance is slowly becoming the next “sinking ship,” with executives rushing to jump out. Whenever there is troubling news related to the company, people predict it will collapse.
After all, some people are already noticing similarities. Remember Sam Trabucco, the co-CEO of Alameda Research? He left the firm a few months before it collapsed in the FTX debacle. Do these Binance executives know something?
The recent developments have investors worried. To some, an eventual collapse is inevitable.
“When Binance goes, it’ll leave a really ugly long lasting black eye on crypto. FTX was the warm up (easy logic: when FTX collapsed, there was a larger fish to fill the gap. Now, Binance is the only fish left),”
crypto skeptic Not Tiger Global wrote.
Meanwhile, Binance has maintained over 1:1 reserves against user assets in its latest audit. However, skeptics doubt if this is true.
After all, the firm has announced it has self-verified its reserves instead of an independent auditor. Some even warn that users won’t be able to withdraw funds soon. So, is Binance the next FTX? Time will show.
