In response to mounting regulatory scrutiny from U.S. authorities, Binance.US and Changpeng Zhao (CZ) are actively seeking to reduce CZ’s majority stake and diminish his influence over the cryptocurrency exchange.
To mitigate unnecessary regulatory scrutiny:
To address the growing regulatory scrutiny faced by Binance.US, the exchange and its founder, CZ, are reportedly exploring avenues to decrease CZ’s majority stake in the company. This strategic move aims to mitigate the impact of regulatory challenges on the exchange’s operations.
Despite Binance’s significant impact in the global web3 landscape since its emergence during the initial coin offering (ICO) frenzy in 2017, both the exchange and its founder have encountered substantial scrutiny and unfounded fear, uncertainty, and doubt FUD throughout the years.
In March, the United States Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance, asserting that the exchange had violated the Commodity Exchange Act by neglecting to register as a futures commission merchant (FCM) with the CFTC.
According to recent reports, allegations suggest that Binance maintained a presence in China until late 2019, despite the exchange’s claims of severing ties with the Asian nation back in 2017 due to the regulatory crackdown on cryptocurrency within the region.
After an extended period of negotiations, Binance.US formally backed out its highly-discussed acquisition agreement with Voyager last month
Given the ongoing regulatory crackdown on cryptocurrencies by U.S. authorities, CZ’s attempt to reduce his stake in Binance.US may face challenges in achieving the intended outcome. This is further compounded by the fact that even domestic exchanges like Coinbase and others are experiencing the impact of stringent regulations within the country.
Numerous participants in the U.S. crypto market, including Kraken, Coinbase, and Circle, are actively considering relocation strategies, with intentions to move their operations overseas. The prevailing regulatory uncertainties have created a challenging environment, and if the current regulatory climate persists, it is likely that more businesses will contemplate a similar course of action.