Binance.US and Changpeng Zhao, the crypto exchange’s founder and primary owner, have been looking at methods to lower his stake in the company, according to the Information, citing two people familiar with the situation.
According to the article, Zhao, who is also the CEO of Binance, the world’s largest crypto exchange, has been trying to sell at least some of his holdings since last summer.
In March of this year, the U.S. The Commodity Futures Trading Commission (CFTC) sued Binance and its CEO Zhao for operating a “illegal” exchange and a “sham” compliance program, according to the agency.
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The CFTC charged Binance, its former chief compliance officer, and Zhao with “willful evasion” of US law, “while engaging in a calculated strategy of regulatory arbitrage to their commercial benefit.”
According to the source, Binance.US management have discussed how lowering Zhao’s ownership could boost the company’s standing with US regulators.
Binance.US officials are concerned that because Zhao is named in the CFTC case, the company may be unable to obtain certain regulatory licenses in the United States as long as he is the majority owner, according to the report.
The report comes after Binance instituted bitcoin withdrawal halts on its exchange twice in a single day. The crypto exchange temporarily halted bitcoin withdrawals for about two hours Sunday afternoon due to a record volume of unconfirmed transactions. Its second halt, which occurred in the evening, lasted slightly over two hours.
Citing heavy volumes and a surge in processing fees as reasons for the withdrawal halts, the crypto exchange said it has adjusted its fees to “prevent a similar recurrence in the future.”
During the withdrawal halts, concerns were heightened by a number of factors, including a rumored $3.3-billion bitcoin withdrawal from the exchange prior to the halt.
Information for this briefing was found via The Information and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
