- Binance.US is trying to improve relations with regulators.
- Binance Chief Changpeng Zhao reportedly is seeking to cut his majority stake in the U.S. business.
- Zhao and the global business have a rocky relationship with U.S. regulators.
With U.S. regulators clamping down on crypto businesses, several industry participants are exploring avenues to avoid drawing their ire. One such business is Binance.US.
The crypto exchange’s global arm notably has a shaky relationship with regulators. Fearing that this relationship could mar how the U.S. business is viewed by regulators, Binance.US and its founder Changpeng “CZ” Zhao are reportedly exploring avenues to reduce his shares in the company.
Zhao to Reduce Binance.US Stake
Zhao, Binance.US’s majority shareholder, has been exploring avenues to sell a portion of his shares since the summer of 2022, according to The Information report on Thursday, May 11.
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The Binance chief has reportedly resumed these efforts in recent weeks following the Commodities Futures Trading Commission lawsuit against Binance, the international business.
In March, the CFTC sued Binance and Zhao for allegedly operating an illegal derivatives trading platform in the U.S. The CFTC lawsuit notably linked Binance with Binance.US, suggesting that Zhao controlled the U.S. entity despite its claims of independence.
The U.S. business reportedly believes Zhao’s majority stake could become a hurdle during licensing applications, suggesting a reduced stake could help the firm garner favor in the eyes of regulators.
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A Binance spokesperson declined to comment on the matter, arguing that Binance.US and Binance are separate entities. Binance.US has yet to respond to a request for comment at the time of writing.
Aside from trouble with the CFTC, the U.S. Department of Justice has reportedly been investigating Binance for money laundering and sanctions violations since 2018.
Binance.US recently terminated a deal to purchase Voyager assets despite a court approval citing the uncertain regulatory environment in the U.S. The agreement had received court approval despite initial resistance from several regulators.
On the Flipside
- Binance is planning to launch a Japanese subsidiary.
- Binance is working to secure approval in the United Kingdom.
Why You Should Care
Binance is regarded as the largest crypto exchange in the world, yet its U.S. business has failed to replicate similar levels of success. The latest report suggests that strained relationships with regulators could be a significant hurdle.
Read this to learn more about the CFTC case against Binance:
Binance Lawsuit Explained: Why CFTC Involvement Is a Big Deal
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