Binance.US Exploring Options to Cut Changpeng Zhao’s Stake

Binance.US execs reportedly worried licenses in the US could be impeded as long as Changpeng Zhao retains majority stake

by Shalini Nagarajan /

May 12, 2023 10:07 am

Web Summit (CC BY 2.0), modified by Blockworks

Binance.US and CEO Changpeng Zhao are actively exploring strategies to reduce his dominant ownership stake in the company, in what appears to be a pursuit to bolster the company’s reputation and standing with US regulators.

Zhao has been trying to sell a portion of his stake since the summer of 2022, The Information reported on May 11, citing two unnamed sources.

Binance and Zhao are embroiled in a lawsuit filed by the CFTC in March.

The CFTC alleged that Binance operated an “illegal” exchange and maintained a “sham” compliance program. It targeted Binance, Zhao and Samuel Lim, the former compliance chief, accusing them of willfully evading US law and engaging in activities outside the US to avoid CFTC regulations.

These activities involved structuring entities and transactions to bypass registration requirements and providing US customers with instructions on circumventing compliance controls.

Both Zhao and Binance.US were already attempting to cut his stake before the CFTC lawsuit. But since the suit, company leaders have discussed how this might help improve the company’s image in the eyes of US regulators.

Executives at Binance.US expressed concerns that the company’s ability to obtain desired regulatory licenses in the US may be hindered as long as Zhao, named in the lawsuit, retains his majority stake, Reuters reported, citing The Information.

Binance.US didn’t return Blockworks’ request for comment by press time.

Having a controlling stake means owning a big chunk (usually over 50%) of a company’s shares. Zhao’s controlling stake means he has the power to call the shots and influence everything from Binance’s operations to strategy.

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