The World's Biggest Crypto Exchange Appears to Be Melting Down

Who's going to be the adult in the room now?

Do or Die

Binance was left to clean up the mess last fall when FTX crashed — but now, the world's biggest crypto exchange appears to be falling apart itself.

As the Wall Street Journal reports, one of the exchange's co-founders warned employees that the company is in a "do-or-die situation" amid major staffing tumult and trouble with financial regulators.

"Every battle is a do-or-die situation, and the only thing that can defeat us is ourselves," Yi He, Binance's chief marketing officer and co-founder, wrote in a message to staff reviewed by the WSJ. "We have won countless times, and we need to win this time as well."

Over the last few months, several of the international exchange's senior executives have departed — including the CEO of its US branch, Brian Shroder — amid government lawsuits and widespread layoffs.

At the heart of the company's issues is Changpeng Zhao, Binance's bombastic co-founder and CEO, who some at the exchange feel should step down after being sued by both the Commodities Futures Trading Commission and the Securities and Exchange Commission for alleged crimes ranging from financial rule-breaking to lying to investors — the latter of which appears to have kicked off declines not only for Binance, but for the crypto industry at large.

Choppy Waters

The WSJ reports that Binance and the Department of Justice have in recent months been in talks about getting Zhao to step down. Better known as "CZ" to those versed in crypto, the CEO is apparently holding firm, much to the chagrin of some of the remaining execs, who think the exchange would be more likely to survive if he departs.

Though Binance's turmoil seems to have reached a fever pitch over the summer, it's far from the first time the exchange or its infamous CEO have weathered storms.

Last December, just a month after the FTX crash, users began withdrawing from the exchange en masse, ultimately taking out a whopping $3 billion in 24 hours. Attempting to stem the investor exodus, Zhao paused withdrawals of one of the currencies and then tried to downplay the decision, saying that although Binance had seen "some withdrawals," it was "very normal market behavior."

Unfortunately, that "normal market behavior" understatement seems to have become a new normal for the company, which saw another major withdrawal event this June as well.

Amid these crises and the others the exchange has seen over the past few years, it's safe to say that Binance is flailing — and with CZ at its helm, it might just be a sinking ship.

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