Nov 29, 2023

Binance founder and former CEO Changpeng "CZ" Zhao is stepping down as chairman of the global exchange's U.S. affiliate's board.

Video transcript

The state of crypto is presented by Tron connecting the world to the power of Cryptocurrency. All right, Binance founder CZ is stepping down from the board of Binance Us after pleading guilty to violating the Bank Secrecy Act last week. Joining us now to discuss this Coin Desk, global policy and regulation managing editor Nick Day, who's also the editor of Coin Desk's state of crypto newsletter. Good morning, Nick. Good morning, Nick. I don't, I don't think you've gotten any rest this year with everything that's going on in the, in the US. So II, I have high hopes for 2024 for you. I, I hope she uses that bed. Yeah. Now you just got the bed real close by just in case I'm just gonna, you know, over, we'll see how it goes. Let's talk about uh the latest in the B saga. So this was announced on X formerly known as Twitter. We learned that CZ is going to be stepping down from the board. Not really a surprise given the events that have unfolded up until now, but talk to us about what's going on. Yeah. So Binance US announced yesterday that CZ would be stepping down from his role as the, uh you know, he is the majority owner of the company and the member of the board. Uh he said he's going to put his voting shares into a proxy. Uh So he'll still, it sounds like he'll still own, you know, his shares what he has, but he will not take an active role in, you know, directing any decisions about finance us, uh which is, of course, the, you know, us affiliated uh of the, you know, global Binance entity. Um So we'll see what that means in practice, but it, as you say, it doesn't seem like a huge surprise given that CZ is, you know, already had to resign as the CEO of finance itself and, you know, dramatically stepped back from his role with that company. Does it matter? I mean, iii, I mean, Binance US is kind of like not a real thing, is it, I, I think it would depend on who you ask. You know, um Binance US certainly thinks it's real and I, you know, as far as the US government is concerned, Binance us and its ties to Binance have been a bit of a concern. We've seen that kind of mentioned, you know, in some of the lawsuits where, uh you know, Binance US was kind of seen as this uh you know, entity, the shell corporation created to, you know, funnel funds and all that to finance itself. Um Binance Us maintains its, its own, you know, independent organization, its own independent exchange that, uh, you know, does stuff. Um, probably the biggest thing is, you know, we'll see what if anything, uh, what this means for the S ECs, ongoing litigation against it. But, I mean, like the revenues are, the, the revenues are the amount of, like a dry cleaner in Manhattan. Yeah, I, you know, I, I'm not sure to what extent, you know, that will be affected by CZ specifically being part of or not part of the board. Um, but yeah, it's, it, it, it, it does feel a little bit like a separate consideration right there. Nick, there's this three year timeline where CC can't be involved in any of finances, um, operations management. Is there a chance that once this three year period is over, he may or he could rejoin the board of Finance Us or become CEO of finance again or hold some kind of executive position. Yeah, I mean, I think the fact that, you know, there is only, uh, you know, a defined three year limitation suggests that that door is always, you know, it will be open again, but obviously the, you know, the ecosystem and finance itself will probably look very different by that point. So, um, you know, I think part of that's going to depend on, you know, just what happens over the next three years. Finance for you, the next three years or the next five years, if you're looking at Vincent instead order, um, it's gonna be a company that's, you know, opening its books to the US government at every request is going to make, you know, all of its past trades, future trades, current trades available, you know, for review is going to have a much stricter, you know, in theory, it's going to have a much stricter compliance process. We'll see what that looks like in practice. Although, you know, Binance has, you know, a lot of emphasis in press releases and things like that over the past couple of months saying, you know, we're beefing up our compliance and, you know, legal team. So, um possibility is always open and I, I, yeah, I'm really just more curious to see, you know, what finance looks like. You know, at this point in 2026 you know, when Binance is facing regulatory scrutiny, we saw country after country jurisdiction after jurisdiction, follow suit and this Cat and Mouse chase kind of seemed to, uh come to fruition. Do you think that now that the US has settled with Binance, um, on these charges that we're going to see other countries, other jurisdictions come after Binance for similar charges. It's definitely possible if those countries can, you know, find enough compelling evidence to bring those kinds of cases, a lot of the countries. And, you know, we just saw this with the Philippines this morning. Um, you know, I lot of countries are telling Binance. Ok. Well, you know, you're not registered here, get out. So if those, if B is no longer operating in those, you know, countries probably a bit more difficult to bring a, you know, a separate criminal enforcement action unless they have something that says, ok, well, you know, either while you were here or, you know, even right now we have proof that, you know, XYZ is going on. Um, the fact that the US did put out a, you know, not only a plea deal statement of facts but you know, just all this information to the world saying like, oh yeah, you know, between November 20 November Sunday 2019 and whatever, you know, finance found it had, you know, hundreds of users from Iran or it's been, you know, supporting funds from various terrorist organizations. Uh I'm sure a lot of, you know, international, you know, law enforcement agencies are going to be paying attention to that. Um, the question is, you know, is Binance enough of a force in those countries to, you know, warrant for action and it'll probably, yeah, it's gonna depend on where the volume is, where the transactions are and you know, to what extent the law enforcement agencies in these countries, in the eu or wherever, uh decide. Ok, well, you know, the 4.3 billion viruses being the US is not enough or, you know, we want to go with our version of, you know, unfortunate action. Um So I think this is a kind of a TV D let's see what happens, um which not a satisfying answer, but you know, it's kind of where things seem to be right now. All right, Nick, we are going to leave it there. Thank you. It's been a pleasure as always hearing your updates and we will see you again. Hopefully tomorrow. Thank you. All right, that was Coin Desk Global Policy and Regulation. Managing editor Nick Day. Don't forget to sign up for the state of crypto newsletter on Coin

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