Crypto website Coinmarketcap curiously posted a story on its site with the title: “What Happens When a Crypto Exchange Goes Bankrupt?”
It would’ve been a normal thing to scroll over one’s social media feed, until one realizes that Coinmarketcap is owned by the embattled crypto exchange Binance.
There are multiple speculations about Binance’s financial standing, what with the firm’s recent layoffs, benefit cuts, and repercussions of its regulatory issues. The most recent signal of internal trouble was the resignation of Binance.US CEO Brian Shroder, which also accompanied a fresh workforce reduction of over 100 employees.
In July, Binance laid off over 1,000 employees and made significant adjustments to its employee benefits, signaling the financial challenges faced by the prominent cryptocurrency giant. But, CEO Changpeng Zhao is still trying to project confidence behind a laughing emoji.
Zhao reassured staff during a company meeting held on Binance’s sixth anniversary that the company remained profitable and unaffected by the Securities and Exchange Commission (SEC) lawsuit.
Following the layoffs, Zhao explained that the workforce reduction was part of an initiative to increase talent density, disputing the accuracy of the reported figures but refraining from providing an exact number.
“We thank all of our ex-team members for their contributions to our growth and wish them all the best. We also congratulate our team members who have grown into these new roles. They are all truly high caliber. We continue to BUILD, and to continue to hire,” he said.
In the Coinmarketcap article, the site touched on the basics of crypto exchange bankruptcy, including the difference between Chapter 11 and Chapter 7 bankruptcy protection, the process for the exchange’s creditors, and government protection in such cases. The article also named notable crypto exchange bankruptcies: FTX, Celsius, FCoin, Cryptopia, Quadriga CX, and Mt. Gox.
The SEC recently faced a setback in its pursuit of immediate access to Binance.US’s software, as the presiding judge expressed reluctance to grant such access. The hearing revolved around the SEC’s motion to compel Binance to provide detailed information and facilitate depositions with its executives, a contentious issue between the two parties over the past week.
Judge Zia Faruqui, in his remarks during the hearing, stated that he was not inclined to permit the inspection at this time. Instead, he suggested that the SEC should formulate more specific discovery requests and engage with a broader range of witnesses.
He emphasized the need for more comprehensive information, stating, “I think we need more than we’ve got right now.”
Coinmarketcap was established in 2013 by IT programmer Brandon Chez while situated in New York City. It grew to be one of the globe’s most renowned websites by 2018. In April 2020, Coinmarketcap was acquired by Binance for an undisclosed sum, with Forbes speculating that the transaction’s value could be as much as $400 million.
Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
