Tech

CZ denies report Binance is considering major breakup with US business partners

02/19/2023
Bitcoin Ethereum News

Binance CEO Changpeng “CZ” Zhao has denied a report that the company is considering cutting ties with United States business partners. Binance has been the object of increasing scrutiny from U.S. regulators in recent weeks.

Bloomberg reported on Feb. 17 that Binance Holdings “is looking at whether to sever ties with intermediary firms such as banks and services firms and is reassessing venture-capital investments in the US,” citing an unnamed source. The source added that tokens from U.S.-based projects, such as Circle’s USD Coin (USDC), may be delisted.

On the same day, in response to a report on the Bloomberg story, CZ tweeted “4. False” in an apparent reference to his New Year’s tweet of “Do’s and Don’ts,” where the fourth item on the list was “Ignore FUD, fake news, attacks, etc.”

CZ stated in a separate tweet, “We pulled back on some potential investments, or bids on bankrupt companies in the US for now.”

CZ tweeted on Feb. 13 that Binance would be reviewing projects in jurisdictions with “ongoing regulatory uncertainty […] to ensure our users are insulated from any undue harm.” Binance Holdings does not serve customers in the United States, who are referred instead to the independent Binance.US.

Both Binance and Binance.US have been the focus of recent investigations by U.S. regulators. The U.S. Securities and Exchange Commission is reportedly looking at ties between Binance.US and trading firms with direct connections to CZ.

Related: Binance CEO: Crypto industry will probably move to non-dollar stablecoins

Binance, but not Binance.US, suspended bank transfers in U.S. dollars on Feb. 8 without explanation, but the action hinted at banking problems. On Feb. 13, the New York Department of Financial Services ordered Paxos Trust to stop minting the dollar-pegged Binance stablecoin BUSD (BUSD) after reports that the SEC was preparing a suit over the coin. Binance was hit with a surge of withdrawals as a result.

Binance chief strategy officer Patrick Hillmann reportedly said on Feb. 15 that the company expected U.S regulators to extract monetary penalties from the companies due to past compliance issues.