May 12, 2023

The Battle for Control: Binance.US and Changpeng Zhaos Stake

Published: May 12, 2023 at 1:30 pm Updated: May 12, 2023 at 1:30 pm

Edited and fact-checked: May 12, 2023 at 1:30 pm

In Brief

Changpeng Zhao is the founder, majority owner, and chair of Binance. He also serves as CEO and cofounder of the global crypto exchange.

Changpeng Zhao is the CEO and co-founder of Binance, the world’s largest cryptocurrency exchange, as well as the creator of the global exchange, Binance.

Changpeng Zhao, the founder of Binance US and the owner of about 15% of the company, is looking for ways to reduce his stake in the company as United States federal regulators have been scrutinizing him closely for the past year, according to news reports. Binance US owner and crypto executive Ben Chang has reportedly been trying to reduce his stake in the company since last summer, according to a report by the Information on May 11, citing people familiar with the matter. The United States federal regulators have scrutinized Binance and Changpeng Zhao heavily over the past year.

In March, the Commodity Futures Trading Commission (CFTC) sued CZ for operating what it alleged was an “illegal” exchange with a “sham” compliance program.

“An investigation found that the firm willfully evaded U.S. law while engaging in a calculated regulatory arbitrage strategy to its commercial benefit.”

Due to his increasing influence over the company, employees of Binance US are concerned that he may not obtain certain regulatory permissions if he remains the majority shareholder, according to news reports.

In February, the SEC sued Paxos, the issuer of Binance’s stablecoin BUSD, resulting in the end of minting. Voyager Digital, a bankrupt crypto lending company, was denied approval for a Binance.US purchase of its assets. It appears that the Securities and Exchange Commission (SEC) is planning to apply the same stringent regulations to American-based crypto exchanges as to banks and stock brokerages.

Major players like Gemini, Coinbase, Ripple, and Galaxy Digital are now looking to offshore following recent SEC enforcement actions. Due to the war on crypto, other major exchanges such as Kraken and Bittrex have already fully or partially shuttered services in the United States.

The US Binance exchange has released a new web3 tool, which allows Americabased users to create unique web3 domain names. The feature is powered by Unstoppable Domains, which offers 3.4 million existing web3 domains.

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About The Author

Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.

Nik Asti