Binance.US Plans to Trim Down Changpeng Zhao’s Majority Stake
- The executives of Binance.US are figuring out ways to trim down the majority stake of Changpeng Zhao in the US exchange.
- The billionaire crypto entrepreneur has been trying to sell at least some of his stake in the US arm since last summer.
- Following the lawsuit filed by the CFTC against Binance and its CEO, the US arm’s executives are worried if they’ll be affected as well.
- The leading crypto exchange is doing ‘everything it can’ to be regulated in the UK due to the “strange” regulatory environment in the US.
Binance.US, the US arm of the world’s largest crypto exchange, Binance, which claims to have no associations with its parent company, has Changpeng Zhao, also known as CZ in the crypto space, as its majority shareholder. CZ is the founder and CEO of the parent exchange, which has been under the scrutiny of authorities in the United States. Interestingly, the executives are figuring out ways to trim down the majority stake of the billionaire in the US arm of the exchange.
According to a report from The Information dated May 11, the executives of Binance.US are talking about ways to cut down on the shares controlled by Changpeng Zhao, as per two people familiar with the matter. One of the sources said that the crypto entrepreneur has been trying to sell at least some of his stake in the US arm since last summer, when the crypto winter started to slow down the development of the industry.
It is important to mention here that the United States Commodities and Futures Trading Commission (CFTC) sued Binance and Changpeng Zhao for allegedly operating a crypto trading platform with a “sham” compliance program and violating the country’s derivatives laws. The agency claims that the exchange willfully evaded US law, “while engaging in a calculated strategy of regulatory arbitrage to their commercial benefit.”
As reported earlier by BitcoinWisdom, the Chairman of the CFTC, Rostin Behnam, recently stated that the exchange intentionally broke laws pertaining to derivatives and commodities and allowed US citizens to access the main exchange via virtual private networks (VPNs) and other obfuscation tools.
“They are starting large companies and offering futures contracts and derivatives to U.S. customers. If you are going to offer futures contracts in the US, there is a clear understanding that you are registered with the CFTC and comply by the law,” said Behnam.
Following this action taken by the CFTC, Binance.US is planning to reduce the stake that Zhao has in the firm to protect its US operations from the wrath of the regulators. The executives of the US arm are worried that since CZ is named in the lawsuit by the regulator, the company may not be able to acquire certain regulatory licenses that it wants to have in the US as long as he is the majority owner.
Moreover, the Senior Trial Attorney of the Securities and Exchange Commission (SEC), William Uptegrove, stated that his agency believes that Binance is operating an “unregistered securities exchange.”
It is also important to mention here that the leading crypto exchange has plans to get regulated in the United Kingdom due to the US right now being a “strange place” for crypto firms. Hillmann, Binance’s chief strategy officer, stated at the Financial Times’ Crypto and Digital Assets Summit that due to the “very confusing” environment in the US, the executives are doing everything we possibly can” to be regulated in the United Kingdom.
A crypto journalist with over 3 years of experience in DeFi, NFT, metaverse, etc. Parth has worked with major media outlets in the crypto and finance world and has gained experience and expertise in crypto culture after surviving bear and bull markets over the years.
