Binance US, a popular cryptocurrency exchange, is reportedly exploring ways to cut its CEO Changpeng Zhao’s (CZ) majority stake in the company. This move could have significant implications for investors and users of the exchange, as well as the broader cryptocurrency industry.
According to a report citing two people familiar with the matter, Binance US is working with regulators to find ways to reduce Zhao’s stake in the company to comply with US regulations. Currently, Zhao holds a majority stake in Binance US through his ownership of the parent company, Binance. While it is unclear exactly how much of a stake Zhao holds in Binance US, reports suggest that it is significant enough to potentially cause regulatory concerns.
If Binance US is unable to address these concerns, it could face penalties or other regulatory action, which could harm both the company and its users.
Consequences of Reducing Zhao’s Stake on Binance
Zhao is widely regarded as a visionary in the crypto industry, and his leadership has been instrumental in the success of Binance US and other ventures. If he were to relinquish control of Binance US, it is possible that investors and users may become wary of the exchange and look elsewhere for their cryptocurrency needs.
Additionally, reducing Zhao’s stake could impact the exchange’s ability to stay ahead of the competition. However, reducing Zhao’s stake in Binance US could also have positive implications for the company and the crypto industry. By complying with US regulations and addressing potential regulatory concerns, Binance US could strengthen its position in the market and attract more investors and users.
Likewise, by reducing Zhao’s stake, Binance US could potentially be seen as a more transparent and trustworthy exchange, which could help to improve its reputation and credibility.
Binance Gets Overwhelmed by Lawsuits
Recall that the U.S. Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and CZ for allegedly being involved in the sales of unregistered commodity trading in the United States. This in turn brought about customers’ lack of trust and confidence in the exchange as Binance USD (BUSD) worth about $500 million was pulled out of the protocol.
In a similar vein, the United States Securities and Exchange Commission (SEC) and New York financial regulator decided against Binance’s plan to acquire Voyager Digital’s assets. The regulator cited that Binance was already faced with money laundering issues and corruption charges.
