off-the-wire

UPDATE 1-Binance.US explores ways to cut founder Zhao's majority stake - report

Kitco Media
By Reuters
Published:
Updated:
Reuters
(Adds details from the Information report and background on CFTC lawsuit against Zhao) May 11 (Reuters) - Binance.US and Changpeng Zhao, the crypto exchange's founder and majority owner, have been exploring ways to reduce his stake in the company, the Information reported on Thursday, citing two people familiar with the matter. Zhao, who is also the CEO of Binance - the world's biggest crypto exchange, has been trying to sell at least some of his stake since last summer, the report said. In March, the U.S. Commodity Futures Trading Commission (CFTC) sued Binance and its CEO Zhao for operating what the regulator alleged was an "illegal" exchange and a "sham" compliance program.


The CFTC sued Binance, its former top compliance executive and Zhao with "willful evasion" of U.S. law, "while engaging in a calculated strategy of regulatory arbitrage to their commercial benefit." Since then, Binance.US leaders have discussed how reducing Zhao's stake might help improve the company's standing in the eyes of U.S. regulators, the report added.


Binance.US executives worry that because Zhao was named in the CFTC lawsuit, the company may not be able to acquire certain regulatory licenses that it wants to have in the U.S. as long as he is the majority owner, the report added.


Binance.US did not immediately respond to Reuters requests for comment.



(Reporting by Jose Joseph in Bengaluru; Editing by Shounak Dasgupta and Shinjini Ganguli)

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