December 9, 2023

Binance.US, the U.S. subsidiary of the world’s largest cryptocurrency exchange, is reportedly exploring ways to reduce its owner and founder Changpeng Zhao (CZ)’s stake. sources indicate CZ has been trying to sell some of its stake since last summer, and the recent regulatory scrutiny may have been the driving force behind that decision.

Binance.US launched sometime in 2019 as a separate entity from global exchanges. However, in light of recent legal issues involving Binance and CZ, executives are considering limiting the exchange’s relationship with its founders to ease regulatory pressure.this Commodity and Futures Trading Commission (CFTC) accused Zhao of knowingly evading federal law and ostensibly operating an illegal digital asset derivatives exchange. Reducing CZ’s majority stake in Binance US may help the exchange obtain the necessary regulatory clearance to operate smoothly in the US market.

Over the past year, Binance and CZ have faced increasing scrutiny from U.S. regulators.exist Response to CFTC lawsuit, Binance emphasized its commitment to compliance, implementing a “three lines of defense” approach to risk and compliance. With CZ still the majority shareholder of Binance US, the management team is reportedly looking at ways to reduce his stake and influence in the company to mitigate potential regulatory hurdles.

Notably, a recent report by venture capital firm Andreessen Horowitz (a16z) shows that the U.S. share of global cryptocurrency developers will decline by 26% between 2018 and 2022. The report pointed to regulatory clarity as a possible reason for the decline, which may have hindered web3’s growth in the US.

Despite the situation, a16z claims it still hopes the U.S. will regain some of its lost ground, citing multiple bills before Congress seeking regulatory clarity on crypto assets, as well as several influential crypto cases that may be decided soon.These include the SEC’s enforcement action against Ripple, the Treasury Department’s Tornado Cash Civil Litigationand the bankruptcy proceedings of companies such as FTX, Voyager and Celsius.

In recent months, the SEC has targeted U.S. cryptocurrency exchanges, imposing regulations similar to those applied to banks and stockbrokers.The crackdown has prompted several key players, including Coinbase and Gemini, considering, among other things, moving their operations overseas.communicate as Kraken and Bitrex Services in the US have been shut down or reduced as the crypto wars continue.

Disclaimer: This article is for informational purposes only. It does not provide or be intended to be used as legal, tax, investment, financial or other advice.