Binance: Lawsuit, layoffs, and price corrections galore – will BNB recover?
- After the SEC lawsuit, Binance faced troubles and had to resort to layoffs.
- The partnership with the ASA was terminated, however, Binance continued to update its exchange.
The litigious actions of the SEC targeting Binance [BNB] heavily impacted both the exchange and its associated network. The onslaught of litigation introduced significant hurdles and caused a period of instability and FUD for Binance and its network.
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The domino effect of the lawsuit
When the news of the SEC going after Binance first hit the market, BNB faced a major price correction. However, that was only the first of many troubles that Binance would have to face.
Recently, Binance was forced to lay off over 1,000 employees globally in recent weeks. According to a source from the Wall Street Journal, the job cuts could eventually impact more than a third of Binance’s total staff, which amounted to approximately 8,000 prior to the layoffs.
Additionally, a CNBC report also stated that Binance is planning to eliminate 1,500 to 3,000 of its global workforce by the end of the year, as disclosed by a Binance employees. However, a Binance spokesperson refuted the 3,000-worker figure, stating it was too high.
Things weren’t looking good for the employees currently working for Binance as well. As of 19 June, Binance ceased offering certain benefits to its employees, as indicated by company messages viewed by the Wall Street Journal.
The decision came in response to the decline in the company’s profits during that period.
Amidst all this, Binance also had to terminate its five-year partnership with the Argentine Soccer Association (ASA), citing a breach of contract. The deal included the development of a fan token for the ASA.
The decision to end the partnership was based on the association’s failure to adhere to the terms of the agreement. The termination marked the conclusion of their collaboration within a relatively short timeframe.
The Binance lawsuit saga continues
According to recent data, a Nevada-based legal entity named Eeon filed a motion to intervene on behalf of customers, as detailed in a filing with the District Court for the District of Columbia. The petitioner argued that both the SEC and Binance attorneys had represented their own interests and had not made any efforts to advocate on behalf of the customers.
Eeon’s intervention sought to ensure customer interests were adequately represented in the legal proceedings.
In the counterclaim filed by Eeon, the entity demanded that Binance and the US SEC pay 20% of the daily value of withheld funds, amounting to $1000 per day per customer.
Additionally, both Binance and the US SEC would equally bear the responsibility for paying penalties—$500 by the US SEC and $500 by Binance and its subsidiaries—for their actions.
According to Eeon, customers who had invested their money in the exchange and cryptocurrencies for an extended period were impacted by the sudden actions of the US SEC. The lawsuit against Binance and Binance.US lacked evidence and clear crypto regulations, disrupting customers’ daily activities.
Eeon also noted that the court had the option to freeze a portion or 50% of crypto assets. This would allow customers to retain some part of their property amidst the legal proceedings.
The show must go on
Despite all the ongoing troubles being faced by Binance, the protocol has managed to make progress on various fronts. In an attempt to attract more users, Binance launched a new feature enabling users to obtain multiple deposit addresses for a single network.
This move may be beneficial to airdrop hunters and probably help in growing the activity on the exchange.
For context, AirDrop hunters actively seek and engage in AirDrop events, where they receive free tokens. With multiple deposit addresses, they can organize and streamline the process of receiving AirDropped tokens, making their participation more efficient and manageable. This enables them to effectively track and manage their engagement in various AirDrop campaigns.
Realistic or not, here’s BNB’s market cap in BTC’s terms
How is BNB doing?
At press time, Binance’s token, BNB, had recovered from the price correction brought on by the market’s FUD. However, over the last few days, the price declined from $255 to $248.
Coupled with that, there was a sharp decline in BNB’s velocity. This indicated that the frequency with which BNB was being traded had dropped drastically.