Binance US and its founder Changpeng Zhao (CZ) are reportedly looking for ways to reduce their stake in the firm after harsh reviews from US federal regulators last year.
CZ, the majority owner of Binance US, has been trying to reduce its stake in the US-based exchange since last summer, according to a May 11 report by The Information citing people familiar with the matter. Binance and Changpeng Zhao have come under intense scrutiny from United States federal regulators over the past year.
SEC Sanctions Kidnap Major Exchanges Overseas
In March, the Commodity Futures Trading Commission sued Binance and Changpeng Zhao for operating the company it claims is an illegal exchange with a bogus compliance program. The firm has been accused of deliberately evading U.S. law while employing a calculated regulatory arbitrage strategy for its business interests.
In response to the lawsuit, Binance claimed regulatory compliance, saying: “We have implemented a robust three line of defense approach to risk and compliance.” Since then, Binance US bosses have reportedly sought ways to reduce CZ’s stake and influence on the company, and were concerned that they would not be able to obtain certain regulatory licenses as long as CZ remained the majority owner.
In February, the SEC sued Paxos for issuing Binance’s stablecoin, BUSD, causing it to go out of print. Meanwhile, the regulator blocked approval of Binance US’s bid for assets owned by bankrupt crypto loan firm Voyager Digital.
It seems that the Securities and Exchange Commission is specifically targeting American-based crypto exchanges to subject them to the same stringent regulations as banks and brokerage firms. As a result, big players like Coinbase, Gemini, Ripple, and Galaxy Digital have started fleeing the US, among those considering moving overseas following the SEC’s recent sanctions.
Other major exchanges such as Kraken and Bittrex have completely or partially stopped their services in the United States as the battle against crypto continues.
57769
