Binance, one of the world’s largest cryptocurrency exchanges, faced a critical decision earlier this year when its CEO and founder, Changpeng “CZ” Zhao, contemplated shutting down its U.S. arm, Binance.US. The move was seen as an attempt to safeguard the broader company amid increasing regulatory scrutiny.
According to The Information, the board of directors of Binance.US, which operates as an affiliate of Binance, voted on the matter. However, they could not reach a unanimous decision, with Binance.US CEO Brian Shroder reportedly blocking the liquidation proposal. CZ serves as the chair of the Binance.US board of directors.
Binance has been under intensified regulatory scrutiny in recent months, facing allegations of operating as an unregistered securities exchange. The Securities and Exchange Commission (SEC) sued Binance, Binance.US, and CZ earlier this month. Additionally, the Commodity Futures Trading Commission (CFTC) sued Binance and CZ in March over accusations of knowingly offering unregistered crypto derivatives products in the U.S.
The mounting legal challenges and regulatory pressure have led Binance to make significant staff cuts as part of its response to the ongoing lawsuits.
The situation reflects the growing challenges faced by major cryptocurrency exchanges as regulators worldwide seek to establish clear guidelines and oversight for the cryptocurrency industry. The outcome of Binance’s legal battles and its future decisions will have significant implications for the crypto market as a whole.