Binance Lays Off 50 US Staff, Faces Investigation in Europe – Crypto News – Crypto News
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Binance Lays Off 50 US Staff, Faces Investigation in Europe Binance Lays Off 50 US Staff, Faces Investigation in Europe

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Binance Lays Off 50 US Staff, Faces Investigation in Europe – Crypto News

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Binance, the world’s largest cryptocurrency exchange, is facing mounting regulatory challenges in Europe and the United States in the aftermath of the United States Securities and Exchange Commission (SEC) filing a civil lawsuit against the company on June 5.

French authorities are investigating the company for alleged “aggravated money laundering” and other illegal activities related to digital asset services, according to Le Monde, Simultaneously, Binance is preparing to exit the Netherlands after failing to secure a virtual asset service provider (VASP) license, the company explained in a blog post on June 16. On top of that, Binance’s US affiliate has reportedly laid off 50 staff members the following charges from the SEC.

A world of trouble

In France, the judicial finance investigation service, at the behest of the specialized interregional jurisdiction of Paris (JIRS), is investigating Binance for suspected violations of know-your-customer (KYC) checks and illegal advertising. The investigation was referred to the Service d’Enquêtes Judiciaires des Finances (SEJF), a government body overseeing financial crime, in February 2022, according to information provided to CoinDesk, Binance France’s president, David Prinçay, confirmed that the exchange was visited by authorities last week and stated that Binance has been fully cooperative in a recent Twitter post.

In the Netherlands, Binance announced its decision to terminate its operations after failing to secure a VASP license. The exchange has stopped registering new users in the country and will halt trading from July 17, leaving existing users with the option to withdraw their funds from the platform. The company also announced that it would be halting withdrawals from its US platform on June 9.

“Although we explored many alternative avenues to service Dutch residents in compliance with Dutch regulations, unfortunately, this has not resulted in a VASP registration in the Netherlands at this time,” the company wrote in a blog post explaining the development. “Binance will continue striving to obtain authorizations to provide our products and services to users in the Netherlands.”

In the US, Binance’s affiliate has reportedly laid off around 50 employees in the aftermath of the SEC’s legal filing against the company. The regulator has accused Binance and its founder and CEO, Changpeng Zhao, of creating Binance.US as part of a “web of deception” to evade securities laws aimed at protecting US investors. The regulatory body has also sued Binance.US’ operating company, BAM Trading, claiming that it misled investors about its trading controls, and requested a federal court to freeze the platform’s assets. These include more than $2.2 billion in crypto holdings and $377 million in US dollar bank accounts.

These developments come as further blows to Binance, which has been facing increasing scrutiny from regulators worldwide. Despite these challenges, Binance claims it is fully committed to working collaboratively with regulators and law enforcement agencies to meet compliance requirements. The company has also emphasized its compliance with EU standards on the prevention of money laundering and financing of terrorism, highlighting the registrations it has obtained in other European countries, including France, Spain, Italy, Poland, Lithuania, and Sweden.

As the regulatory landscape for cryptocurrencies continues to evolve, there is plenty of speculation both within and outside of Web3’s walls as to how the industry will move forward, especially in the US. Legal experts predict the SEC will only continue its “regulation-by-enforcement” strategy. However, recent revelations about the body’s decision-making process on crypto token classification could alter how its court battles ultimately play out.

Editor’s note: This article was written by an nft now staff member in collaboration with OpenAI’s GPT-4.

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