Executives resign, lay off thousands of employees, and cut employee benefits? Binance faces scrutiny over company's operational status.

Crypto exchange Binance just celebrated its sixth anniversary, but Adam Cochran, a partner at the venture capital firm Cinneamhain Ventures who has been critical of the company, took to Twitter this morning to question the true reasons behind the recent layoffs at Binance.

Adam: What Is the Actual Financial Situation If Even Low-Cost Expenses Are Cut?

Adam stated that Binance's previous explanation for the massive layoff of 1,000 employees raised doubts:

If Binance's layoffs were not aimed at cost reduction, then why did you announce on June 19th that all employee long-term benefits would be canceled, citing "decreased profits" as the reason?

Previously, a Binance spokesperson confirmed the layoffs but refused to disclose specific numbers, stating that it was to focus on increasing talent density within the organization to ensure the company's flexibility and vitality.

Adam further raised several questions:

• The average salary of terminated employees at Binance is significantly lower than the average wage in the United States, some as low as $50,000 annually, with the lowest known salary being $10,500 for Latin American employees. Compared to Coinbase, Binance should have more than 12 times its revenue but offers lower compensation and personnel costs.
• With the strong market recovery in 2023, there is no reason for Binance to experience a profit decline during this rebound.
• Subsidies such as mobile phone reimbursements are mostly low-cost one-time allowances, and the actual amount saved by their removal should be minimal.
• Binance claims to be still hiring externally but has apparently informed the internal team of a recruitment freeze and expects more layoffs in the coming months.
• Binance employees are prohibited from explicitly listing their employment at Binance on social media, yet they are very active in private discussions.

Adam pointed out:

If the profit decline is too significant that a company like Binance, with annual revenues in the hundreds of billions of dollars, needs to cut millions of dollars to save expenses, I am more interested in the true situation at Binance.

He also added that all low-level managers at Binance with an estimated annual salary of $30,000 have the authority to view personal KYC data, reset 2FA verification, or even change personal emails or passwords, highlighting that security concerns often stem from within. However, a response was made in the comments, explaining that this is a common practice for over 90% of exchanges.

Can CZ's 4 Keep People's Confidence Stable?

Since Binance was accused by the U.S. Securities and Exchange Commission (SEC), rumors have been rife, including doubts about holding 90% of the circulating supply of $TUSD and the public opinion of several executives resigning one after another after the lawsuit for self-preservation. Despite Binance CEO Changpeng Zhao CZ consistently stating that it's just FUD and all reports are fabricated by the media, concerns about potential resignations and layoffs persist.