According to a report from Thursday, May 11th, the CEO and founder of Binance, Changpeng Zhao, is looking to reduce his stake in the company’s US affiliate. The move is allegedly intended to improve the firm’s standing with regulators and lawmakers in the wake of increased scrutiny and a CFTC complaint.
Binance.US Seeking to Reduce CZ’s Majority Stake
Changpeng Zhao, the founder, and CEO of Binance, has reportedly been trying to reduce his stake in his company’s US affiliate since last summer. Additionally, the efforts to cut his majority stake have allegedly redoubled in recent months as both he and his firm, have found themselves under increased regulatory pressure.
Reducing CZ’s stake in the company would, reportedly, help boost its standing with American authorities. Throughout the years, Zhao has been the target of numerous allegations linked to the fact he was born in China’s Jiangsu province, despite the fact he immigrated to Canada during his childhood. On the other hand, a recent report indicates that Binance has indeed been hiding links to China for years.
More recently, however, troubling reports that Binance and Binance.US are not as separated as claimed emerged. Allegedly, Binance secretly accessed and transferred around $400 million of its US affiliate’s funds to a CZ-controlled trading firm using secret access to its Silvergate Bank account.
Binance Under Increased Pressure in the US
Along with much of the cryptocurrency industry, Binance has recently found itself under increased scrutiny. In late March, both the company and its CEO were sued by the CFTC on allegations that its compliance programs have been “ineffective” and failed to prevent money laundering and terrorist financing.
Furthermore, the complaint accuses Binance of allowing US-based customers to access its platform without being properly registered. The claims of failing to prevent terrorists from accessing the exchange were bolstered by recent reports that Isreal has seized hundreds of Binance wallets linked to ISIS.
Binance also recently found itself under a Department of Justice probe due to allegedly failing to prevent Russians from using cryptocurrencies to evade US sanctions. The heightened scrutiny and numerous accusation leveled at the exchange sparked rumors that it is planning to exit the American market, but Zhao has since denied the claims.
This article originally appeared on The Tokenist
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