Tag: Binance.Us.

CZ Comments on Binance US CEO’s Departure

by Blockchain News

In a tweet that recently caught the public’s eye, Binance’s founder, CZ, provided insights into the leadership changes at Binance US. He verified that Brian Shroder, who led Binance US for the last two years, is taking a break. CZ highlighted Shroder’s instrumental contributions, noting, “Under his leadership, Binance.US raised capital, enhanced its products and services, strengthened its internal operations, and captured a substantial market presence.”

Furthermore, CZ introduced the crypto community to Norman Reed, a seasoned professional with experience at the SEC, New York Fed, Ripple, and DTCC. Reed is now poised to take the reins of Binance US, especially at a time when the crypto industry is grappling with an increasingly complex regulatory environment. CZ’s confidence in Reed’s capabilities was evident as he mentioned him as “the right person to lead Binance US in this market.”

However, the leadership transition at Binance US is just the tip of the iceberg. A report from The Wall Street Journal has revealed deeper changes within the company. Following Shroder’s departure, two other top executives, Krishna Juvvadi, Head of Legal, and Sidney Majalya, Chief Risk Officer, are also making their exits. This comes amidst a significant downsizing effort by Binance US, which has seen a reduction of its staff by nearly a third.

Both Juvvadi and Majalya brought extensive experience to Binance US. Juvvadi, who joined in May 2022, previously served as the global head of compliance at Uber and was instrumental in Binance US’s communications with the SEC. Majalya, on the other hand, had roles at both Intel and Uber before joining Binance US in December 2021.

The regulatory challenges facing Binance US are mounting. The SEC’s recent actions, notably their August request to submit confidential documents to the U.S. District Court for the District of Columbia, have sparked curiosity. Some view this as an indication of a possible criminal inquiry by the Department of Justice. A May report from Bloomberg, suggesting a Justice Department investigation into Binance, adds to this conjecture.

Despite the swirling challenges and uncertainties, CZ’s message to the crypto community remains unwavering and clear: “Ignore FUD. Keep building.” His tweet serves as both a reassurance and a call to action for the industry. As the crypto landscape undergoes rapid changes, Binance US’s strategic leadership transitions underscore its determination to not only adapt but also to lead the way forward.

Disclaimer & Copyright Notice: The content of this article is for informational purposes only and is not intended as financial advice. Always consult with a professional before making any financial decisions. This material is the exclusive property of Blockchain.News. Unauthorized use, duplication, or distribution without express permission is prohibited. Proper credit and direction to the original content are required for any permitted use.

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Will the Binance.US CEO’s Resignation Trigger a Domino Effect?

by Blockchain News

Staffing and Executive Changes

Binance.US, the American subsidiary of the global cryptocurrency exchange, has recently undergone significant staffing changes. The company confirmed the departure of its president and CEO, Brian Shroder, who had joined the firm in September 2021. This move has raised questions in the industry about whether Shroder’s exit could trigger a “domino effect,” leading to further high-profile departures or changes. Alongside Shroder’s exit, approximately 100 positions, or a third of the company’s workforce, have been eliminated. Chief Legal Officer Norman Reed has stepped in as the interim replacement for Shroder.

A spokeswoman for Binance.US claimed in a statement that the company’s recent moves were motivated by the SEC’s aggressive attempts to cripple our industry, highlighting the negative effects on innovation and real-world jobs in the United States. The company’s commitment to its clients and its goal to secure “more than seven years of financial runway” while it switches to a crypto-only exchange model were both further reaffirmed by the spokesperson.

Regulatory Issues

Binance, Binance.US, and the exchange’s co-founder Changpeng “CZ” Zhao are the targets of legal actions by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission. The accusations include running an unauthorized exchange, offering unregistered securities, breaking the law on commodities, and misusing client cash. In reaction to these regulatory constraints, Binance.US temporarily stopped all fiat withdrawal channels and froze dollar deposits on June 9. 

Binance faces heightened regulatory scrutiny globally. Recently, the Australian Securities and Investments Commission (ASIC) conducted a search at Binance Australia’s offices, probing its now-defunct local derivatives business. This comes after Binance Australia’s derivatives operation license was revoked in April. Additionally, on May 18, 2023, Binance halted PayID AUD deposits due to third-party payment provider issues. European regulators, including Belgium’s FSMA and Germany’s Bafin, have also posed challenges for the crypto giant.

A decline in market share

According to Reuters,  Binance.US’s market share has showen a dramatic decline. Market share for the exchange in the United States fell precipitously from over 22% in April to roughly 0.9% by June 26. The fact that Binance.US’s worldwide market share has also dropped recently, from 2.39% to just 0.6%, emphasizes this reduction even more. According to reports, the company’s trading volume is less than estimates from early 2020.

Community Responses

The future of Binance and Binance.US has become a source of considerable concern for the cryptocurrency community. An influential Twitter account in the cryptocurrency world named WhaleWire expressed grave concerns regarding Binance’s future. He even used analogies to warn that Binance’s possible demise would eclipse even FTX’s.

Binance is a complete disaster. 

When 95% of your executives resign in the span of a year, you know something isn’t right… 

They will eventually blow up, and have an even larger explosion than FTX. Don’t be surprised when it happens.

Disclaimer & Copyright Notice: The content of this article is for informational purposes only and is not intended as financial advice. Always consult with a professional before making any financial decisions. This material is the exclusive property of Blockchain.News. Unauthorized use, duplication, or distribution without express permission is prohibited. Proper credit and direction to the original content are required for any permitted use.

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Binance Hires Former DOJ Prosecutor M. Kendall Day as Legal Counsel in SEC Lawsuit

by Blockchain News

Bloomberg reports that Binance Holdings Ltd. has recently hired M. Kendall Day, a former prosecutor from the US Department of Justice (DOJ), as their attorney to represent them in the ongoing lawsuit initiated by the Securities and Exchange Commission (SEC). Court documents submitted on Thursday revealed Binance’s decision to bring on board Day as part of their legal team. As per Day’s profile on Gibson Dunn & Crutcher law firm’s website, he served as Acting Deputy Assistant Attorney General in the DOJ’s Criminal Division for an impressive 15 years. Additionally, he held the position of Head of the Money Laundering and Asset Recovery Section (MLARS), a division under the jurisdiction of the DOJ. In this capacity, Day held nationwide regulatory authority over the DOJ’s money laundering investigations, including deferred prosecution agreements and non-prosecution agreements involving financial institutions.

It’s worth noting that as early as last year, a Reuters article on the DOJ’s four-year investigation into Binance mentioned the hiring of Kendall Day to facilitate communication with the DOJ, with Day even meeting with DOJ officials in Washington.

In recent weeks, both Binance and Binance.US have been strengthening their legal teams in anticipation of the SEC’s lawsuit. On June 13th, George Canellos, a partner at Milbank’s New York office, was announced as their legal advisor. Canellos, who previously served as Co-Director of the SEC’s Enforcement Division, currently oversees global litigation and arbitration at Milbank.

On June 5, 2023, the Securities and Exchange Commission took decisive action by charging Binance Holdings Ltd., Binance.com (the world’s largest crypto asset trading platform), BAM Trading Services Inc. (Binance’s US-based affiliate), and Changpeng Zhao (Binance’s founder) with various securities law violations.

Furthermore, on June 17, 2023, the Securities and Exchange Commission secured emergency relief in its ongoing litigation. All defendants, including Binance Holdings Limited, BAM Management US Holdings Inc., BAM Trading Services Inc., and Changpeng Zhao, agreed to repatriate assets held for the benefit of Binance.US customers back to the United States. To safeguard the interests of customers and protect their assets, the United States District Court for the District of Columbia issued an order prohibiting BAM Trading Services Inc. and BAM Management US Holdings, Inc. from utilizing corporate assets except for regular business operations. This order ensures that Binance.US customers retain the ability to withdraw their assets from the platform and guarantees the protection and localization of assets remaining on the platform until the resolution of the SEC’s pending litigation against Binance Holdings Ltd., BAM, and their founder, Zhao.

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Former Student of SEC Chairman Weighs in on Binance and Coinbase Lawsuits

by Blockchain News

Former MIT Sloan School of Management student and teaching assistant for Gary Gensler, known only as ‘Kenny’ on Twitter, has offered insights into the recently filed lawsuits against Binance and Coinbase by the Securities and Exchange Commission (SEC), as well as his personal journey into the world of blockchain and crypto.

Kenny took to Twitter to share his experience of studying under the current SEC Chairman, Gensler, before his appointment to the role. Notably, Kenny wrote a report on Binance Coin (BNB) as a student, which he shared with both Gensler and Binance founder Changpeng Zhao, or CZ as he is commonly known.

Reflecting on this time, Kenny wrote, “It wasn’t the report but the interaction between Mr. Gensler & Mr. Zhao. I felt an opportunity for a future of blockchain that was open to innovation from both the side of the regulator and the innovator.”

Later, while interning in Shanghai in the summer of 2019, Kenny worked with Victor Ji on a project related to decentralized identification for small businesses. Kenny recalls reaching out to Gensler to discuss these ideas, describing their conversation as thoughtful.

In the tweets, Kenny acknowledges his growth in the world of blockchain and credits Gensler, Ji, and Zhao for providing direction and inspiration. Kenny states, “Meeting Mr. Gensler, hacking with Victor, getting recognized by Mr. Zhao… All felt like winds from the universe guiding me.”

This personal connection made the recent lawsuits filed by the SEC against Binance and Coinbase particularly impactful for Kenny. On June 5 and 6, 2023, the SEC filed 13 charges against various Binance entities and sought emergency relief to ensure the protection of Binance.US customers’ assets, respectively.

Speaking about the lawsuits, Kenny said, “The recent news regarding the lawsuits against @binance and @coinbase is truly an unfortunate outcome from the perspective of someone inspired by the same figures entangled in this.”

Despite his personal connections, Kenny remains hopeful for the future of blockchain and crypto, concluding with, “I truly hope that whatever comes out of this takes into account all of the hard work that the brightest minds are putting into the space to change the world.”

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Binance.US Struggles to Find Banking Partner in the U.S.

by Blockchain News

Binance.US, the United States arm of the global crypto exchange, has been experiencing difficulties in establishing a new bank partner to serve as a fiat on-ramp and off-ramp for its clients in the country. The exchange has been relying on middleman banks to store funds on its behalf, after the recent failures of Silvergate and Signature Bank left it without banking services.

According to a Wall Street Journal report on April 8, Binance.US needs a bank to directly hold its clients’ U.S. dollars. However, recent attempts to establish direct banking relationships with banks such as Cross River Bank and Customers Bancorp have failed. The regulatory crackdown on banks with crypto clients is another factor contributing to the exchange’s struggles. In March, the U.S. Commodity Futures Trading Commission (CFTC) sued Binance Holdings and its CEO, Changpeng “CZ” Zhao, for alleged trading violations. The cryptocurrency exchange has been the focus of a CFTC investigation since 2021.

Binance.US customers have been affected by the absence of a direct bank. In a recent status update, the exchange stated that it “was transitioning to new banking and payment service providers over the next several weeks,” adding that some U.S. dollar deposit services would be temporarily impacted during the transition. Currently, Binance.US is holding customer funds via the financial technology firm Prime Trust, and a spokesperson for Prime Trust stated that all funds received from clients are stored through its banking partners.

In response to the challenges it is facing, a spokesman for Binance.US stated that the exchange is working with multiple U.S.-based banking and payment providers and continues to onboard new partners while upgrading its internal systems to create a more stable fiat platform and offer additional services.

Binance.US is not the only crypto firm experiencing banking challenges. In the United Kingdom, banks are moving away from accepting clients from the crypto sector, and the few banks still working with crypto firms are requesting more documentation and information about how they monitor clients’ transactions.

The challenges faced by Binance.US and other crypto firms in establishing banking relationships with traditional financial institutions highlights the need for greater regulatory clarity and guidance in the crypto industry. As the industry continues to grow and mature, it is essential for regulators and financial institutions to work together to establish clear guidelines and standards that can help foster a more stable and secure financial ecosystem.

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Binance.US Struggles to Find a Bank Partner in the United States

by Blockchain News

Binance.US, the United States arm of the global cryptocurrency exchange, has been struggling to find a bank partner to serve as a fiat on-ramp and off-ramp for its clients in the country. According to a report from the Wall Street Journal on April 8, the recent failures of Silvergate and Signature Bank have left Binance.US without banking services, forcing it to rely on middleman banks to store funds on its behalf.

The regulatory crackdown on banks with crypto clients has also contributed to Binance.US’s struggles. In March, the U.S. Commodity Futures Trading Commission (CFTC) sued Binance Holdings and its CEO Changpeng “CZ” Zhao for allegedly trading violations. The cryptocurrency exchange has been the focus of a CFTC investigation since 2021.

Binance.US needs a bank to directly hold its clients’ US dollars, but recent attempts to establish direct banking relationships with banks, such as Cross River Bank and Customers Bancorp, have failed. As a result, Binance.US customers have been affected by the lack of a direct bank. In a recent status update, the exchange said that it “was transitioning to new banking and payment service providers over the next several weeks,” adding that some USD deposit services would be temporarily impacted during the transition.

Currently, Binance.US is holding customer funds via financial technology firm Prime Trust. A spokesperson for Prime Trust stated that all funds received from clients are stored through its banking partners.

“We work with multiple U.S.-based banking and payment providers and continue to onboard new partners while upgrading our internal systems to create a more stable fiat platform and offer additional services,” a spokesman for Binance.US told the WSJ.

Binance.US is operating in a similar environment to that which crypto firms are experiencing in the United Kingdom, where banks are moving away from accepting clients from the crypto sector. The few banks still working with crypto firms in the U.K. are requesting more documentation and information about how they monitor clients’ transactions.

In order to address these challenges, Binance.US is actively seeking new banking and payment service providers while upgrading its internal systems to create a more stable fiat platform and offer additional services to its customers. Despite the current difficulties, the exchange remains committed to providing a safe and reliable platform for its clients to trade cryptocurrencies.

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US Judge Supports Government Bid to Quash Binance.US’s $1 Billion Deal

by Blockchain News

The US government’s bid to quash a $1 billion deal by Binance.US to buy the assets of Voyager, a bankrupt crypto lender, has received support from District Judge Jennifer Rearden. The judge stated that the government had a “substantial case on the merits” and promised to move quickly to settle the dispute, given that delays could cost as much as $10 million per month for the estate. This decision came after objections from the US Attorney, who argued that the contract effectively rendered Voyager immune by exculpating it from breaches of tax or securities law.

Earlier in March, U.S. Bankruptcy Judge Michael Wiles had approved the sale, but Judge Rearden put it on hold this week. In her further reasoning published on Friday, Judge Rearden appeared sympathetic to government arguments, saying that “the Exculpation Clause appears to go further than the quasi-judicial immunity doctrine allows.” The judge also noted that the government’s arguments have “gone entirely unrebutted” by Voyager and its creditors, neither of which has provided any authority for the proposition that a bankruptcy court can release criminal liability.

Binance.US’s bid to purchase Voyager’s assets for $1 billion has been embroiled in controversy, with the US government seeking to block the deal due to concerns about Voyager’s alleged breaches of tax and securities law. Binance.US is a cryptocurrency exchange that operates in the US and is a subsidiary of the larger Binance platform. Voyager is a crypto lender that filed for bankruptcy in February 2022 after facing regulatory issues.

The controversy surrounding the deal underscores the ongoing debate about the regulation of cryptocurrencies and related assets. While cryptocurrency advocates argue that the decentralized nature of these assets makes them immune to traditional forms of regulation, governments and financial institutions are increasingly seeking to impose greater oversight and control. The situation with Binance.US and Voyager highlights the complexities and challenges involved in reconciling these competing interests.

In addition to the issues related to the sale of Voyager’s assets, the case also raises broader questions about the role of bankruptcy courts in addressing criminal liability. Judge Rearden’s decision to put the sale on hold suggests that the court is taking seriously the concerns raised by the US government. The ultimate outcome of this case could have far-reaching implications for the regulation of cryptocurrencies and the legal responsibilities of companies operating in this space.

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Binance.US Halts BUSD Services Amid Investigation

by Blockchain News

In the midst of ongoing global banking turmoil, Binance.US has announced the temporary suspension of some services related to its BUSD stablecoin pairs via the One Common Billing System (OCBS). The suspension affects BUSD crypto deposits and withdrawals, as well as buying, selling, and converting crypto options, according to a status notice on the Binance.US dashboard. The company has stated that it is currently investigating the issue and that the services are “suspended temporarily.”

This announcement follows the platform’s temporary suspension of Apple Pay and Google Pay deposits on March 30, as the company is transitioning to new banking and payment service providers over the next few weeks. Additionally, Binance.US has also halted debit card deposits for up to 5% of its customers starting from March 30, 2023. However, the platform has assured its customers that it is working to restore all services as soon as possible.

The temporary suspension of BUSD services via OCBS comes at a time when Binance.US’ global affiliate, Binance, is facing legal action from the U.S. Commodity Futures Trading Commission (CFTC). The CFTC has filed a suit against Binance and its CEO, Changpeng “CZ” Zhao, for alleged trading violations, citing the exchange’s failure to meet compliance obligations by not registering with the regulator.

Binance.US was launched in September 2019 as a separate entity from Binance, which is not available to U.S. users due to local regulations. Catherine Coley, the first CEO of Binance.US, has reportedly enlisted the services of a former federal prosecutor and top cop at the CFTC to represent her in the U.S. government’s investigations into Binance.US. Since leaving Binance.US in June 2021, Coley has remained silent about her whereabouts in the media and has not posted anything on her Twitter.

Binance.US’ temporary suspension of BUSD services via OCBS is likely a precautionary measure in light of the legal action taken against its global affiliate. As the company investigates the issue and transitions to new banking and payment service providers, customers may experience some disruption in their BUSD-related transactions. However, Binance.US has reassured its customers that it is working to restore all services as soon as possible.

In recent years, Binance has become one of the largest and most well-known cryptocurrency exchanges in the world, but its growth has not been without controversy. The exchange has faced scrutiny from regulators in various jurisdictions, and its relationship with certain governments has been strained due to concerns over money laundering and other illegal activities. Nonetheless, Binance and its affiliates continue to operate and expand their services, with new offerings and features being introduced regularly.

Overall, Binance.US’ decision to halt certain BUSD services temporarily is likely a prudent response to the ongoing uncertainty and legal issues surrounding the global cryptocurrency industry. As the company navigates these challenges and works to restore full functionality to its platform, customers can continue to trade and invest in cryptocurrencies with confidence, knowing that their assets are secure and protected.

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Court Approves Voyager Digital’s Acquisition by Binance.US

by Blockchain News

The United States District Court for the Southern District of New York has approved Binance.US’s acquisition of bankrupt brokerage company Voyager Digital, rejecting the US government’s motion to halt the deal. Judge Michael Wiles ruled that any delays in the acquisition would harm Voyager’s former clients who are waiting to return their funds. The court also confirmed its prior approval of Voyager Digital’s Chapter 11 bankruptcy plan, which involves selling billions of dollars in assets to Binance.US to regain liquidity and pay back customers.

The government’s appeal for a stay of the confirmation order was denied, as Judge Wiles deemed the accusations of fraud, theft, or tax avoidance as exaggerations and mischaracterizations. The appeal had also demanded the removal of a provision preventing US authorities from pursuing anyone involved with the sale. The court’s decision allows Binance.US to close the sale and issue repayment tokens to impacted Voyager customers.

The US Securities and Exchange Commission had objected to the redistribution of funds from Voyager to Binance.US, citing violations of US securities laws. However, Judge Wiles rejected their arguments, stating that 97% of 61,300 Voyager account holders favored the restructuring plan. The bankruptcy plan is expected to result in Voyager creditors recovering approximately 73% of the value of their funds.

This ruling is a significant win for Voyager Digital and Binance.US, as it allows them to move forward with their acquisition plans and repay impacted customers. It also sets a precedent for future bankruptcy cases involving crypto-related companies, as it shows that bankruptcy courts may be willing to approve deals involving the transfer of crypto assets. The decision highlights the importance of transparency and customer satisfaction in bankruptcy proceedings, as shown by the overwhelming support for Voyager Digital’s restructuring plan. Overall, this ruling is a positive step towards building a more stable and trustworthy crypto ecosystem.

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US Officials Oppose Voyager Sale Provision

by Blockchain News

United States officials have expressed their desire to remove a provision from the bankruptcy plan of Voyager Digital, a defunct lender, as they believe it would hinder the government’s ability to enforce its police and regulatory powers. Voyager Digital has proposed selling its digital assets to Binance.US, a leading cryptocurrency exchange. However, the provision in question would prevent US officials from legally pursuing anyone involved in the sale.

In a motion submitted to a New York bankruptcy court on March 14, U.S. trustee William Harrington, along with other government attorneys, claimed that the court “improperly exceeded its statutory authority” when it approved the pardoning provision. They have requested a delay of two weeks for the court’s approval of the sale, allowing them time to file an appeal.

The provision aims to protect those involved in carrying out the sale from being held personally liable for its implementation. The court approved this measure on March 7, after a February 28 filing revealed that 97% of Voyager customers were in favor of the plan. While the U.S. officials have no objections to other aspects of the proposed sale, they argue that the provision would impede their ability to enforce their regulatory powers.

On March 6, the U.S. Securities and Exchange Commission (SEC) also raised objections to the plan, particularly the “extraordinary” and “highly improper” exculpation provision. The SEC argued that the repayment token would constitute an unregistered security offering and that Binance.US is operating an unregulated securities exchange.

Voyager Digital’s proposed sale comes after the company filed for bankruptcy due to financial troubles, which have been affecting the crypto lending industry. Crypto lenders, such as Voyager, provide customers with loans backed by their cryptocurrency holdings. In recent times, these lenders have faced increased scrutiny from regulatory bodies, leading to difficulties in continuing operations.

A hearing on the issue is scheduled for March 15 at 2:00 pm Eastern Time. Based on the latest estimates, the plan is expected to result in Voyager creditors recovering approximately 73% of the value of their funds. The outcome of this case will have a significant impact on the future of crypto lending and may set a precedent for similar cases involving bankruptcy sales and regulatory enforcement.

In conclusion, US officials are contesting a provision in Voyager Digital’s bankruptcy plan that would prevent legal pursuit of those involved in the sale of its assets to Binance.US. With a hearing scheduled for March 15, the outcome may have broader implications for the crypto lending industry and regulatory enforcement.

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Bitcoin (BTC) $ 26,948.22 0.05%
Ethereum (ETH) $ 1,674.77 1.13%
Litecoin (LTC) $ 65.63 0.10%
Bitcoin Cash (BCH) $ 234.78 0.56%