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CZ Steps Down as Chairman of Binance.US Amid Legal Challenges

The resignation of Changpeng Zhao as chairman of Binance.US's board reflects the growing impact of regulatory compliance on major players.


CZ has stepped down as chairman of Binance.US amid legal challenges.
Credit: David Ryder/Getty Images

SEATTLE, WA – Changpeng 'CZ' Zhao, the founder and former CEO of Binance, has announced his decision to step down as chairman of the U.S. affiliate's board. This move comes amidst a backdrop of regulatory scrutiny and a recent settlement involving the global exchange.


Zhao's Transition and the Impact on Binance.US


Binance.US, in a recent tweet, clarified that although it was not a direct participant in the last week's multibillion-dollar settlement between Binance and U.S. regulators, Zhao's decision to step down marks a notable shift in the company's leadership dynamics. The tweet stated,

"As CZ transitions to life after Binance, he has decided to step down from his role as Chairman of our Board of Directors and transferred his voting rights through a proxy arrangement."

This arrangement ensures that Zhao's involvement in the company will now be purely economic, removing him from any governance role.


Binance's Regulatory Hurdles and Settlement


The move by Zhao is seen as a response to the increasing regulatory pressures on Binance. The company was accused of operating in the U.S. without proper registration, which allegedly facilitated transactions between U.S. crypto investors and customers from sanctioned regions.


As a result, Binance agreed to a substantial settlement of $4.3 billion and committed to a "complete exit" from the U.S. market. This settlement also included Zhao's resignation as CEO.


Binance.US's Distinct Status and Ongoing Challenges


A senior Treasury official highlighted that Binance.US, being a registered business, was not part of the settlement involving its parent company. However, Binance.US is not free from regulatory scrutiny.


The U.S. Securities and Exchange Commission (SEC) is currently pursuing an enforcement action against it for offering what is deemed as unregistered securities to U.S. investors. This case, which also involves Binance and Zhao, remains ongoing.


The Future Direction of Binance.US


Despite these challenges, Binance.US reassures its commitment to growth and customer focus. As the tweet concluded,

"Binance.US continues to be led by Norman Reed and our existing, experienced management team. We are well capitalized to continue to build and grow our platform... with renewed clarity and momentum, while maintaining the same customer first commitment."

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