Binance.US and Changpeng Zhao (CZ) are looking to reduce the latter’s majority stake and influence over the crypto exchange, due to increasing scrutiny from U.S. regulators in recent months.
Curbing unnecessary regulatory scrutiny
In a bid to tackle the unfavorable regulatory scrutiny being directed at Binance.US, the exchange and its founder, CZ, have reportedly been exploring ways to reduce the latter’s majority stake in the company.
Despite Binance’s impact in the global web3 landscape since its launch during the initial coin offering (ICO) craze of 2017, the exchange and its founder have had their fair share of scrutiny and even FUD over the years.
Last March, the United States Commodity Futures Trading Commission (CFTC), filed a lawsuit against Binance, alleging that the exchange violated the country’s Commodity Exchange Act by failing to register as a futures commission merchant (FCM) under the CFTC.
Recent reports also allege that the exchange had a presence in China until late 2019, contrary to its claims of dumping the Asian giant in 2017 due to the regulatory crackdown on crypto in the region.
Binance to leave the US?
In April, reports emerged that three U.S. residents had filed a lawsuit against Binance.US, CZ, and three influencers, including Ben Armstrong, also known as BitBoy, for offering unregistered securities to users.
Last month, Binance.US officially backed out of its much-talked-about acquisition deal with Voyager after several months of negotiations.
With the current regulatory onslaught against crypto by U.S. authorities, CZ’s bid to reduce his stake in Binance.US may not achieve the desired result, as even native exchanges such as Coinbase and others are also feeling the brunt of the harsh regulations in the country.
So far, a good number of crypto market participants in the U.S., including Kraken, Coinbase, and Circle are actively nursing plans to move abroad, and many more businesses could follow the same path if the current regulatory dark clouds remain.