Binance US has been in talks with the CEO of Binance, Changpeng Zhao popularly known as CZ, to sell his stake in the US-based exchange. Binance was launched in 2017 while Binance US was launched as a separate exchange for US citizens in 2019 due to tighter regulations from the US on how Binance, and the entire crypto market operate.
Despite the opening of the US-based arm of the exchange, there have been more attacks on the firm and CZ himself. In December, it was reported that the US Department of Justice planned to sue Binance CEO CZ.
The DoJ were making connections and inquiriesenquiries into the operations of Binance which they said was not in line with anti-money laundering laws. According toPar the report, a plea deal was being discussed between lawyers representing both parties involved.
SEC, BUSD, and CZ
In yet another disagreement, the SEC ordered the shutdown of BUSD in Q1 2023, a significant asset traded on the Binance exchange. Paxos, the issuer of BUSD, was instructed by the SEC to cease minting BUSD (Binance USD), a stablecoin pegged to the US dollar.
In response to the action taken by the SEC and their allegations against Paxos and the issuance of BUSD, CZ revealed that neither himself nor Binance was behind BUSD as Binance only allowed Paxos to use its brand for issuing the stablecoin.
The US authority said that BUSD was an unregulated security and as such all operations around it must be stopped from February 21, 2023.
CFTC sues Binance
While still embroiled in the conflict with Binance and the SEC, the CFTC (Commodity Futures Trading Commission) filed a lawsuit against Binance in the last week of March 2023 for trading and derivatives law violations. In the suit, Binance was accused of unlawfully permitting US customers to participate in its derivatives trading services without holding a proper derivatives license.
According to the CFTC, Binance and CZ should be prohibited from trading and any other services mentioned in the lawsuit. The CFTC also demanded restitution of all profits earned by Binance, along with revenues, salaries, commissions, loans, and fees obtained from U.S. users, as well as civil penalties for the violations.
CZ to reduce control
In response to these allegations and actions against CZ and Binance, the leadership of the company has been in talks to reduce the stake held by CZ. CZ wants to sell some of his stakes to enable Binance to have a safer stand with US regulators.
According to the report, Binance leadership believes that if this is done, it will give the firm a better chance to get the licenses it wishes to get in the US and be in the good books of the SEC, CFTC, and other authorities in the US.