The United States Securities and Exchange Commission (SEC) crackdown on crypto firms has had a major impact on Binance’s business. The crypto exchange has reportedly laid off over 1,000 employees and reduced some benefits in the past few weeks, citing the “current market environment and regulatory climate” as the cause of the decline in profits. A spokesperson for Binance told Cointelegraph that they are considering scaling back on “certain products, business units, staff benefits and policies” to address business and regulatory concerns.
Binance is yet to face the courts and the 13 charges brought against it by the SEC, as well as the outcome of an investigation by the U.S. Justice Department targeting its activities and executives.
Despite the uncertain future, Binance is still the most popular centralized crypto exchange in the world, holding assets worth over $63 billion. A token breakdown by DefiLlama reveals that the majority of assets held in Binance include Tether (USDT) (27.55%), Bitcoin (BTC) (26.95%), BNB (BNB) (12.82%), and wrapped Ether (10.08%).
On Binance’s anniversary on July 14, the exchange’s CEO Changpeng Zhao noted that their journey was “never all smooth sailing.”
This week’s Crypto Biz looks at Binance’s ongoing efforts to reduce declining profits, Ripple’s expectation that U.S. banks may soon adopt XRP (XRP) and the first signs of venture capital returning to web 3.0 investments in crypto.
Ripple CLO says court ruling could encourage banks to adopt XRP
Stu Alderoty, chief legal officer of Ripple Labs, believes that U.S.-based banks may turn to XRP for cross-border transactions following a recent court ruling. “Hopefully, this quarter will generate a lot of conversations in the United States with customers, and hopefully, some of those conversations will actually turn into real business,” he said during an interview. With the label of “security” seemingly no longer hanging over XRP, partnerships between Ripple and banks dampened by the SEC lawsuit could find new life. Bank of America had been eyeing the blockchain firm in 2019, and American Express first partnered with Ripple in 2017. With the advent of Web 3.0, the potential for investment opportunities in crypto tokens, blockchain products and even startups is now more viable than ever.
Binance cuts back on employee benefits, citing ‘decline in profit’
Global cryptocurrency exchange Binance has been forced to reduce certain employee benefits due to reevaluation efforts at the firm. The company has discontinued offering reimbursement for expenses such as mobile phone use, fitness and working from home. Binance stated that this was due to the “current market environment and regulatory climate”, which has resulted in a decline in profit, indicating that more cost-cutting measures may be necessary. This follows a large-scale layoff in June that impacted over 1,000 employees at the exchange. Binance and Zhao have both been targeted in lawsuits by the SEC for allegedly offering unregistered web 3.0 crypto tokens in the United States.
Marathon shareholders file lawsuit against company’s top management
Crypto mining company Marathon Digital has been taken to court over allegations that its CEO Fred Thiel, alongside other top executives, have breached their fiduciary duties, unjustly enriched themselves and wasted corporate assets. According to the complaint, the company’s management has been downplaying its issues, artificially inflating Marathon’s valuation, receiving excessive compensation, making profitable insider sales, and receiving unjustifiably elevated bonuses based on false and misleading statements.
The lawsuit also raises questions about the differences between Web 1.0, Web 2.0, and Web 3.0, and the investment opportunities and crypto tokens available in the Web 3.0 space. Furthermore, it looks at the blockchain versus Web 3.0 debate and the potential products and startups that are part of the Web 3.0 ecosystem.
Polychain Capital, Coinfund raise $350 million for new web 3.0 crypto funds
Venture firms in the web 3.0 space are looking to make new investments in crypto projects, as Polychain Capital raised $200 million for a new investment fund and Coinfund secured $152 million for a seed fund. Polychain still aims to raise $400 million in total for the fund, and currently operates three funds with around $2.6 billion in assets under management. Coinfund’s CEO Jake Brukhman mentioned that the company had set a goal of raising $125 million, but due to the recent surge of interest in the industry, they managed to raise an extra $27 million. The total venture funding for crypto startups has declined by 76% year-over-year due to the bear market and turbulence in the industry.
Before you go: Bitcoin rally will lead to “speculative blow-off top” in 2024, Mark Yusko predicts
BlackRock’s application for a spot Bitcoin exchange-traded fund has been seen as the start of a new crypto bull market, according to Mark Yusko, the chief investment officer and founder of Morgan Creek Capital. Yusko believes this will culminate in a “speculative blow-off top” near the halving scheduled for April 2024.
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