Binance US and its owner Changpeng Zhao have reportedly been looking for ways to reduce his stake in the exchange.
Zhao launched the crypto exchange’s American arm in 2019 and owns a controlling stake in it.
People familiar with the matter revealed that CZ has been trying to sell part of his stake since last summer.
Binance US, the United States-based subsidiary of the world’s largest crypto exchange, is reportedly seeking to cut the stake of its owner and founder Changpeng Zhao (CZ). The American crypto exchange is working with Zhao and exploring ways to reduce the crypto billionaire’s controlling stake in the exchange.
Binance US Hopes To Reduce Regulatory Heat By Reducing CZ’s Stake
According to a report by The Information, Binance US and Changpeng Zhao have been looking into ways to reduce the latter’s stake in the crypto exchange for quite some time now. People familiar with the matter revealed that Zhao has been trying to sell part of his stake since as early as last summer. Zhao launched Binance US in 2019, just two years after he founded the more popular international exchange.
The intensifying regulatory scrutiny of Zhao, Binance, and its American arm has prompted the exchange to expedite the divesting process. In light of the recent legal trouble involving Binance and Zhao, the executives at Binance US have discussed how limiting the exchange’s relationship with Zhao and the international entity may help take some of the regulatory heat off the American entity. Given that Zhao holds a majority stake in the US exchange, reducing his share may put the exchange in a more favorable position in terms of its relationship with U.S. regulators.
The top management of Binance US believes that Changpeng Zhao’s involvement in the lawsuit that was recently filed by the U.S. Commodities and Futures Trading Commission (CFTC) may prevent the exchange from securing certain regulatory licenses to ensure smooth operation in the US crypto market. Earlier this year, the CFTC charged Zhao with willful evasion of federal law and operating an illegal digital asset derivatives exchange.