The last weeks were marked by notable news splashes about Binance, and the problems of this exchange.
- The media reported about layoffs at Binance. Bitcoin exchange Binance has begun laying off staff. Presumably, the percentage of laid-off staff will be 20%, reported reporter Colin Wu, citing his own sources.
The effect of COVID-19 and the impact of Russian invasion of Ukraine had so much negative impact on most businesses. Most businesses had to downsize to cut costs. Apart from some leading pharmaceutical companies that made so much gain from the sales and distribution of vaccines and some Oil and Gas firms that benefited from the high price of crude and gas, many firms underperformed. Also, the introduction of artificial intelligence is changing the workspace. Some companies are laying off staff because these AI tools can replace humans. Laying off of workers is not a cardinal sign that Binance was facing business problems.
- In your opinion, is this a consequence of increased pressure on China by the U.S.?
From the surface view of Binance, it looks more American than Chinese. It indeed has a high number of Chinese staff but most of the top executives are American and European. And it pays its tax in the US, which means it contributes financially to the economy of the US. Except the US is seeing what I am not and feels that Binance is having secret ties with China or they want to promote more American exchanges to take some market shares for Binance.
- What will the problems of Binance lead to for crypto market and crypto users?
We are already experiencing the impact of this court case. The result is always FUD which will affect the price of most cryptocurrencies. The sector will become volatile and this will discourage people from investing.