Binance is a cryptocurrency exchange.US and its founder, Changpeng Zhao (CZ), are apparently looking for methods to minimize his share in the company following a year of intense scrutiny from US federal officials.
According to a May 11 article by The Information citing persons familiar with the subject, the crypto entrepreneur — Binance.US’ primary owner — has apparently been trying to lower his interest in the US-based exchange since last autumn.
Binance chairman Changpeng Zhao have come under severe investigation from US federal regulators in the last year.
The Commodity Futures Trading Commission sued Binance and CZ in March for operating a “illegal” exchange with a “sham” compliance scheme.
The company was charged with wilfully circumventing US law “while engaging in a calculated strategy of regulatory arbitrage to their commercial benefit.”
Binance has claimed regulatory compliance in response to the case, saying Cointelegraph, “We have implemented a robust ‘three lines of defense’ approach to risk and compliance,” at the time.
Binance has been around since then.US executives are apparently looking for measures to diminish CZ’s investment and influence in the company, fearing that they will be unable to obtain certain regulatory approvals as long as CZ remains the primary owner.
Cointelegraph contacted global exchange Binance, which declined to comment on the situation.Individually and as the biggest stakeholder of the US exchange. Binance.US had not responded by the time this article was published.
The SEC sued Paxos, the issuer of Binance’s stablecoin BUSD, in February, thereby ending minting. Meanwhile, the regulator denied Binance.US’s proposal for the assets of the bankrupt crypto lending firm Voyager Digital.
The Securities and Exchange Commission appears to be deliberately targeting American-based crypto exchanges in order to subject them to the same strict regulations as banks and stock brokerages.
The result has been an exodus from the United States, with key firms like as Coinbase, Gemini, Ripple, and Galaxy Digital among those considering a move abroad in the aftermath of recent SEC enforcement action.
As the war on crypto continues, other prominent exchanges such as Kraken and Bittrex have already completely or partially shut down services in the United States.