Binance US’s business is facing rapid shrinkage due to regulatory uncertainty and poor market conditions. Foreign media The Block reported, citing people familiar with the matter, that under such circumstances, as long as Binance founder Changpeng Zhao (CZ) has a formal connection with Binance US, it will hinder the growth of Binance US. In a recent all-hands meeting, the team discussed three possible operational directions and what would be needed to achieve them:
Continue operations centered on business growth
Continuing growth plans, launching new products such as stock and futures trading, and obtaining licenses for derivatives trading. But to do so, CZ would have to resolve its issues with the Securities and Exchange Commission and either transfer its stake in Binance US to a blind trust or sell it outright.
Cut operating costs to invest in infrastructure
Slightly cut the company's operating costs while making necessary investments in the platform, such as upgrading its subaccount capabilities and AWS infrastructure. But given the current market environment, it takes some guts to invest.
Enter "hibernation" state
The "hibernation" strategy is to maintain normal business operations while significantly reducing costs until the company's environment improves.
Choose the third route
Since the SEC filed the lawsuit, Binance US’s performance has plummeted, with monthly trading volume plummeting from $10.6 billion to $70 million. For now, the company appears to be opting for a third strategy, laying off a third of its workforce and temporarily placing legal chief Norman Reed in charge.
People familiar with the matter said that if CZ can successfully resolve the regulatory issues it currently faces, or if Congress enacts new regulations, Binance US will likely continue its expansion strategy after this period of hibernation. Of course, if a violent bull market can usher in, it will also help promote the business development of the transaction.
This article Is CZ a hindrance to Binance US’ growth? People familiar with the matter: There are only three paths left for Binance US. The post appeared first on Zombit.