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Binance grumbles about reports of mass layoffs, France moves toward an open door for crypto influencers, and US lawmakers call for greater powers to prevent the use of crypto by Chinese and Mexican drug traffickers.
A Binance executive took to Twitter this week to play down reports that the world’s largest crypto exchange is planning to axe 20 percent of its staff.
Responding to a report from Wu Blockchain, an independent crypto journalist, Binance chief of communications Patrick Hillmann said the company “is not” cutting one in five staff.
Instead, Hillmann said that Binance is working on “streamlining” some of its staff teams, as part of a routine “talent density audit”.
“Since joining Binance, we have regularly gone through a talent density audit and resource allocation exercise every six months or so,” he said. “This is a cyclical process.”
Hillmann said that “several teams” are involved in these talent density audits, including human resources, risk and operations, and they come to their conclusions based on staffing needs on an ad hoc basis.
“There is no specific number, just direction on where we need to streamline,” he said. “This has frankly been part of Binance's secret sauce.”
Asked by another tweeter whether the streamlining process could, in theory, still amount to a 20 percent staff cut, Hillmann’s response was ambiguous.
“It could also be a much smaller figure (e.g. 5%),” he said. “We won't know until our teams conduct the talent density audit. Again, we do this annually. It has nothing to do with ‘market conditions’ today.”
According to Wu Blockchain’s original report, “multiple sources” have confirmed that Binance has already begun laying off a large number of its 8,000 staff.
Although the exact proportion of cuts is still “uncertain”, Colin Wu, the journalist behind Wu Blockchain, was told by sources that 20 percent of staff may be let go by the end of June.
Bybit beats it from Canada
Last month, VIXIO reported that Binance has withdrawn from the Canadian market due to new rules imposed by the Canadian Securities Administrators (CSA).
In particular, Binance said the imposition of investor limits and enhanced checks on stablecoin purchases meant that Canada was “no longer tenable” for its business.
Under the new rules, crypto exchanges will need to obtain written permission from the CSA in advance of offering stablecoins to investors.
This week, it was Bybit’s turn to retreat from Canada, while indicating that it too would be unable to comply with the CSA’s latest rules.
“It has always been Bybit's primary objective to operate our business in compliance with all relevant rules and regulations in Canada,” the company said.
“In light of recent regulatory developments, Bybit has made the difficult but necessary decision to pause the availability of our products and services.”
As of this week, Bybit will no longer onboard new Canadian customers and, as of July 31, Bybit will disable new deposits and new trades by existing customers.
On September 30, any customers who have not yet manually closed their positions will have them closed automatically.
Bybit is the third major exchange to pull out of Canada in the last few months, in addition to Binance and OKX.
French Senate passes revised crypto influencer bill
The French Senate has voted unanimously to adopt a new bill that will regulate promotional activities by paid crypto influencers online.
Known as the Influencers Act, the bill will become law in 15 days unless it is referred to the Constitutional Council.
Prior to the final vote, the cross-party Senate Economic Affairs Committee made several changes to the bill that will make it easier for crypto firms to employ paid influencers.
An earlier version of the bill would have allowed influencers to promote crypto-assets only on behalf of firms that are fully licensed by the Financial Markets Authority (AMF) as digital asset service providers (DASPs).
Ultimately, this was deemed to be too restrictive, as currently there are no fully licensed DASPs in France, and the measure would have undermined France's aspirations of becoming a "crypto hub".
Instead, the final version of the bill will allow influencers to promote crypto-assets on behalf of any firm that is registered as a DASP with the AMF.
As registration is mandatory to offer crypto trading and custody services in France, and is based only on anti-money laundering/counter-terrorist financing (AML/CTF) controls, this opens up the use of influencers to a much wider range of firms.
“This text is unprecedented because it is the first in Europe to legally define the activities of commercial influence and influencer agents,” said Sophie Primas, senator and president of the committee.
“In the Senate, we are once again proud to be at the forefront of regulating the digital economy, which must be promoted, supported, but also supervised.”
US Senator condemns crypto’s role in fentanyl crisis
Finally, this week senator Elizabeth Warren (D-MA)called for greater powers to be given to the US government to prevent crypto-assets from being used in the illicit fentanyl trade.
At a hearing of the Senate Banking Committee, Warren drew attention to the use of bitcoin and the Tether stablecoin by Mexican drug cartels who purchase fentanyl precursor chemicals from China.
Citing new research from blockchain analytics firm Elliptic, Warren said that more than 90 chemical companies based in China are currently accepting crypto payments for precursor sales.
According to Elliptic, these companies have received more than $27m in crypto payments to date, and have shipped enough precursors to produce $54bn worth of fentanyl.
Posing as potential buyers, Elliptic researchers heard from Chinese suppliers that Mexican buyers prefer to pay in crypto.
“They always use USDT or Bitcoin to pay,” said one supplier. “It is no problem.”
As noted by Elliptic, the number of crypto transactions received by Chinese suppliers increased by 450 percent in 2022 compared with the previous year.
In 2022, synthetic opioids were responsible for more than 75,000 deaths in the US, and among Americans aged 18 to 45 fentanyl overdose is now the leading cause of death.
“Fentanyl is fueling the most severe drug crisis our country has ever seen,” said Warren.
Going forward, Warren said she plans to reintroduce her bipartisan Digital Asset Anti-Money Laundering Act, a bill that aims to close loopholes in AML rules that are being exploited by fentanyl producers and traffickers.
