Binance CEO Changpeng “CZ” Zhao is looking to let go of some of his majority stake in the U.S. arm of the exchange, according to a report by The Information citing “two people familiar with the matter.”
One of the publication’s sources reportedly said that the move was in the works, while the other said that Binance.US executives “have discussed” how it might make the company more palatable to U.S. regulators, who have recently turned up the heat on Zhao’s global Binance enterprise.
Back in March, the leading U.S. derivatives regulator, the Commodity Futures Trading Commission (CFTC), filed a lawsuit with a Chicago federal court accusing Binance of unauthorized derivatives trading by offering futures, swaps, and options on many leading cryptocurrencies.
The suit claims Binance was servicing U.S. clientele despite not having registered with the CFTC.
“Binance has taken a calculated, phased approach to increase its United States presence despite publicly stating its purported intent to ‘block’ or ‘restrict’ customers located in the United States from accessing its platform,” said the CFTC.
The CFTC also accused the exchange of having insufficient anti-money laundering (AML) and know-your-customer (KYC) controls and allegedly evading or helping U.S. clients evade regulators.
Binance called the lawsuit an “incomplete recitation of facts” and told Decrypt at the time that “the complaint filed by the CFTC is unexpected and disappointing as we have been working collaboratively with the CFTC for more than two years. Nevertheless, we intend to continue to collaborate with regulators in the U.S. and around the world.”
Binance battles regulators
The CFTC is not the only Washington agency with its sights on Zhao following the dramatic collapse of FTX.
At the end of April, reports emerged that Binance CEO Changpeng Zhao had hired lawyers to defend himself against multiple legal threats filed against Binance recently by the SEC, the CFTC, and the Department of Justice.
Around that time, bankrupt crypto lender Voyager said Binance.US had axed a deal to acquire the company’s assets. Voyager was one of the high-profile casualties of Terra’s collapse last May.
In a statement to Decrypt, Binance cited “the hostile and uncertain regulatory climate in the United States” as the main reason behind the decision to back out.
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