Binance’s US-regulated arm Binance.US is looking for ways to reduce Binance founder Changpeng Zhao’s stake in the company due to concerns over a regulatory crackdown on Zhao’s international business empire.
To reduce the perceived regulatory risk in the US, Changpeng Zhao, better known as CZ, has tried to sell at least a portion of his stake in Binance. Information informed of on Thursday, citing two sources “familiar with the matter.”
The report added that efforts to reduce CZ’s stake have been ongoing since at least last summer.
According to the report, senior management at Binance.US believes that reducing CZ’s ownership stake in the company will make it look more favorably on US regulators, especially in light of the ongoing crackdown on the crypto industry in the country.
In particular, it is believed that CZ’s large stake in Binance.US may make it impossible for the firm to obtain the necessary licenses to legally operate in the US and would therefore be necessary to dilute its ownership.
CZ and Binance were sued in March over alleged securities law violations by the Commodity Futures Trading Commission (CFTC), including allowing US traders to trade crypto derivatives on its international exchange.
Binance has responded to the allegations claiming the lawsuit is an “incomplete recitation of the facts”, and CZ has also personally called the lawsuit “unpredictable and disappointing”.