Binance.US seeks to reduce Changpeng Zhao’s majority stake: report

Crypto exchange Binance US and its founder Changpeng Zhao (CZ) are reportedly looking at ways to reduce their stake in the company amid increased scrutiny from US federal regulators over the past year.

The crypto executive — the majority shareholder of Binance US — has reportedly been trying to reduce his stake in the US-based exchange since last summer, according to a May 11 report from The Information, citing people familiar with the matter. ,

Binance and Changpeng Zhao have been under intense scrutiny from federal regulators in the United States for the past year.

In March, the Commodity Futures Trading Commission (CFTC) accused Binance and CZ of running an “illegal” exchange with a “sham” compliance program.

The company was accused of deliberately circumventing US law, “while engaging in a calculated strategy of regulatory arbitrage for its own commercial gain.”

In response to the lawsuit, Binance has claimed regulatory compliance, telling Cointelegraph, “We implemented a robust ‘three lines of defense’ approach to risk and compliance at the time.

CZ responded to the CFTC on March 28. Source: Binance.com

Since then, the US owners of Binance have reportedly looked for ways to reduce CZ’s stake and influence in the company, fearing that they may be unable to acquire certain legal licenses as long as CZ remains the majority shareholder. Will be unable

Cointelegraph reached out to global exchange Binance, which declined to comment on the issue regarding Binance US and CZ being individual and majority shareholders of the US exchange. Binance US was unresponsive at the time of publication.

Connected: This is why the CFTC suing Binance is a bigger deal than SEC enforcement

In February, the SEC sued Paxos, the issuer of Binance’s stablecoin BUSD, resulting in a halt to mining. Meanwhile, the regulator approved a bid by Binance.US for assets from bankrupt crypto lending firm Voyager Digital.

It appears that the Securities and Exchange Commission (SEC) is specifically targeting US-based crypto exchanges to bring them under the same strict regulations as banks and stockbrokers.

The result is an exodus from the US with major players including Coinbase, Gemini, Ripple and Galaxy Digital looking to move overseas following the recent SEC enforcement action.

Other major exchanges like Kraken and Bittrex have already shut down all or part of their services in the United States as the war on crypto continues.

Magazine: Does SEC Chairman Gary Gensler Have the Last Word?

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