Regulatory concerns surrounding Binance.us and its owner, Changpeng Zhou (CZ), have reportedly culminated in investors pulling out of a $ 100 million funding round.
The failed funding round also prompted Binance.us CEO Brian Brooks’ surprise decision to resign after serving as its executive for only three months.
Brooks, the former interim currency controller and former chief legal officer at rival exchange Coinbase, cited “strategic differences” as he stepped aside. The funding round was intended to be the first step on Binance.us’ path to an initial public offering (IPO).
According to the New York Times, Brooks initially courted Potential investors, including Ray Lane from venture capital firm GreatPoint, and an executive from Japanese company SoftBank, with the assurance that Binance.us would comply with all US regulatory guidelines.
However, investors reportedly pulled out due to concerns surrounding CZ’s 90% -owned stake in the US-based exchange Binance, along with anxieties regarding an ongoing investigation of the US authorities reportedly scrutinize CZ on tax and money laundering issues.
NYT also reports that the lack of a clear separation between Binance and Binance.us operations raised concerns among investors.
Brooks publicly announced his resignation through August 7. cheep. A spokesperson for Binance.us stated that the company would continue to take steps towards its goal of completing an initial public offering in the United States.
An IPO from Binance.us would put the exchange in a better position to compete with Coinbase, which completed its own IPO on April 14th. CZ hoped that the investment round would allow Binance.us to gain a better position with US regulators to allow the IPO to continue.
Despite the recent troubles, CZ still seems confident that Binance.us will be able to attract the investments they need and make an initial public offering. He said Bloomberg in an interview published on August 19 that there is still interest from “top tier” investors, adding:
“Binance.US is also targeting IPO in the not too distant future […] It’s just a matter of time.”
Binance has been under regulatory pressure in a variety of jurisdictions in recent months. The UK Financial Conduct Authority (FCA) required Binance to stop all regulated activities in the UK at the end of last June. As a result of the FCA lawsuit, major banks, including HSBC UK They have reduced credit purchases from Binance.
Binance stopped operations in Ontario in June, after the provincial government took a tough stance against cryptocurrency trading in general. Crypto exchanges Bybit and Kucoin also came under heavy criticism from lawmakers in the Canadian province.
Furthermore, Binance has been chosen to remove support for Korean won (KRW) and halted Korean language support services last week as South Korea prepares to tighten its encryption regulations.
On July 3, the SEC of Thailand also issued A criminal complaint again against Binance for illegally operating a digital asset business in the country. The SEC reportedly issued several warnings that were ignored by the exchange.