Cryptocurrency exchange Binance US and its founder Changpeng Zhao (CZ) are reportedly looking for ways to reduce their stake in the company, amid harsh scrutiny from US federal regulators over the past year.
The crypto executive, majority owner of Binance US, has reportedly been trying to reduce his stake in the US-based exchange since last summer, according to a report. report by Information on May 11, citing people familiar with the matter.
Binance and Changpeng Zhao have come under intense scrutiny from United States federal regulators over the past year.
In March, the Commodity Futures Trading Commission (CFTC) sued Binance and CZ for operating what it claimed was an "illegal" exchange with a "bogus" compliance program.
The firm was accused of willfully evading US law, "while engaging in a calculated strategy of regulatory arbitrage for its commercial benefit."
In response to the lawsuit, Binance has reclaimed regulatory compliance, telling Cointelegraph: "We have implemented a robust 'three lines of defense' approach to risk and compliance," at the time.
Since then, Binance US bosses have reportedly been looking for ways to reduce CZ's stake and influence over the company, concerned that they will not be able to acquire certain regulatory licenses as long as CZ remains the majority owner.
Cointelegraph reached out to global exchange Binance, which did not comment on the matter regarding Binance US and CZ as an individual and majority shareholder of the US exchange. Binance US did not respond by press time.
Related: This Is Why The CFTC Sues Binance Is More Important Than An SEC Application
In February, the SEC sued paxos, the issuer of Binance's BUSD stablecoin, resulting in the end of minting. Meanwhile, the regulator approval blocked of an offer by Binance.US for assets belonging to bankrupt crypto-lending firm Voyager Digital.
It appears that the Securities and Exchange Commission (SEC) is specifically targeting US-based crypto exchanges to subject them to the same strict regulations as banks and brokerage houses.
The result has been a Exodus in the US with major players including coin base, GeminiRipple and Galaxy Digital among those seeking a move abroad following the recent SEC enforcement action.
Other major exchanges like kraken and bittrex they have already fully or partially shut down services in the United States as the war on cryptocurrency continues.
Magazine: Does SEC Chairman Gary Gensler have the last word?
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