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Binance.US Seeks Ways to Reduce Founder CZ’s Majority Stake

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Changpeng Zhao (CZ), the Binance Founder, is seeking ways to bring down his ownership stake in the company.

The crypto exchange Binance.US, founded by the Binance Chief CZ, is allegedly seeking ways to cut down Changpeng Zhao’s ownership stake in the firm.

More Details of the Story

On Thursday, May 11, the information was released by those familiar with the issue that CZ majority owner and founder of Binance.US is exploring ways to offload his company ownership.

According to his close employees, CZ has been trying to trade off a piece of his majority stake since Q2 of 2022.

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A knowledgeable person said the company’s executives are trying to take advantage of the situation to curry favor with the US regulators.

Reports have shown that Binance’s top executives plan on reducing CZ’s ownership position.

At least, it can help them be on the United States regulator’s good side.

The top bosses and executives are worried about CZ’s connection to the CFTC lawsuit.

The uncertainty of the exchange’s regulatory licenses, if Changpeng Zhao remains the majority stakeholder in the company, scares the executives.

What may have triggered the Act?

It seems that the CFTC lawsuit may have been the cause of the action.

Last March, the CFTC (Commodity Futures Trading Commission) mentioned the name of CEO Zhao and Samuel Lim, COO, in a complaint.

The target of the complaint was the Binance.US subsidiary.

The CFTC accused the company of several infractions.

They are looking for opportunities to penetrate the corporate veil.

According to the agency, Binance.US exploited business connections in the country to make sizeable profits.

Also, CZ and the exchange intentionally ignored registration and compliance responsibilities under United States federal law.

Furthermore, the CFTC stated that Zhao and Lim assisted American customers while ignoring federal laws.

Allegedly, they use virtual private networks to overshadow Binance’s geographical constraints.

There is also an implication in the document that the exchange concealed its ownership and organizational structure through “a web of corporate entities.”

READ ALSO: Kraken Creates Phony Crypto Account To Apprehend Hackers

The regulators charged Binance, its CEO, and the former compliance executive of the organization for conducting “willful evasion” through exploiting regulatory arbitrage.

The former and current Binance.US executives are calling their lawyers for the CFTC action.

A former executive, Catherine Coley, requested James McDonald of Sullivan and Cromwell to represent her during the CFTC’s lawsuit against Binance.

 

 

 

 

 

 

 

 

 

 

 

 

 

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