In the midst of growing regulatory challenges faced by Binance and its CEO, Changpeng “CZ” Zhao, a recent report from The Information revealed that the crypto exchange considered shutting down its U.S. subsidiary. The hostility from regulators in the country compelled Zhao to explore options to protect the international arm of the exchange.
The report indicated that CZ Zhao had entertained the idea of leaving the U.S. in early 2023 to safeguard the exchange’s global operations. However, Brian Shroder, the current CEO of Binance.US, opposed the move, expressing concerns about the potential negative impact on the platform’s customers and the broader crypto investor community.
The crypto space has witnessed the bankruptcy of significant companies over the past two years, such as FTX and Celsius, which has already tarnished the industry’s reputation. Closing Binance.US could have worsened the situation and possibly triggered further market instability.
Sources familiar with the matter revealed that the Binance.US board of directors, chaired by Zhao, voted on the issue during a meeting where the possibility of closure was discussed. Despite Zhao’s initial consideration, he failed to garner enough support to proceed with the shutdown.
Binance and CZ Zhao have been facing mounting regulatory pressures not only in the U.S. but also internationally. The U.S. Securities and Exchange Commission (SEC) filed a complaint against the company and its CEO, accusing them of violating securities laws in the country.
As a consequence, Binance.US has been losing market share to competitors and making efforts to reduce Zhao’s stake in the company. However, the challenges faced by Binance are reflective of broader industry struggles, as regulatory bodies like the SEC move to enforce their regulatory frameworks.