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Binance CEO’s shocking decision – why he almost shut down US arm

Binance

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TL;DR

  • Reports suggest that CEO Changpeng Zhao considered shutting down Binance’s arm in the United States as a means of safeguarding the global company. 
  • The exchange and its CEO, Changpeng Zhao, have faced intensified regulatory scrutiny in the United States.
  • Despite these challenges, the exchange has continued to expand its global operations. In a recent announcement, Binance unveiled the launch of Binance Japan on August 1.

Binance, one of the world’s largest cryptocurrency exchanges, has found itself embroiled in regulatory challenges and faced mounting pressure from US regulators in recent months. Reports suggest that CEO Changpeng Zhao considered shutting down the platform’s arm in the United States as a means of safeguarding the global company. However, a unanimous decision to liquidate the US entity was not reached, with Binance.US CEO Brian Shroder opposing the abrupt shutdown due to concerns about its potential impact on users.

According to anonymous sources cited by a tech media outlet, the board of directors of Binance’s US entity, Binance.US, initiated a vote on the liquidation proposal. While some believed that this measure could shield the parent company from further regulatory scrutiny, Shroder stressed that a sudden closure would force users to hastily move or liquidate their assets, potentially causing significant disruptions.

Binance and its CEO, Changpeng Zhao, have faced intensified regulatory scrutiny in the United States. On March 27, the US Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance and Zhao, accusing them of trading violations. Subsequently, on June 5, the US Securities and Exchange Commission (SEC) filed a separate lawsuit against the exchange, its US arm, and Zhao, alleging that the exchange enriched itself while exposing investors to risks.

Binance expansions

Despite these challenges, the exchange has continued to expand its global operations. In a recent announcement, the exchange unveiled the launch of the platform in Japan on August 1. The new platform offers spot trading for 34 tokens, and the exchange plans to migrate its global users based in Japan to this local version starting on August 14. The move is aimed at complying with Japan’s regulatory framework.

In the midst of growing regulatory and transparency concerns surrounding stablecoins, Zhao addressed the importance of diversification during a Twitter ask-me-anything (AMA) session on July 31. He expressed caution about stablecoins like Tether (USDT), which is currently the largest stablecoin by market capitalization, and acknowledged that even Binance USD (BUSD) comes with unforeseeable risks.

Binance’s global presence and its commitment to expansion raise questions about how the company will navigate the evolving regulatory landscape. The crypto industry has experienced increasing scrutiny from regulators worldwide due to concerns about investor protection, financial stability, and potential illicit activities facilitated through digital assets.

The potential closure of Binance’s US arm could have had significant ramifications, considering the exchange’s sizable user base in the country. Such a move might have forced users to seek alternative platforms, leading to liquidity issues and potential asset sell-offs. Nevertheless, the decision not to proceed with the liquidation indicates that the exchange is exploring other avenues to address regulatory concerns without disrupting its services to US users.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Lacton Muriuki

Lacton is an experienced journalist specializing in blockchain-based technologies, including NFTs and cryptocurrency. He dabbles in daily crypto news rich with well-researched stats. He adds aesthetic appeal, adding a human face to technology.

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