- Binance CEO Changpeng Zhao has denied claims that the exchange is considering delisting US-based cryptocurrencies.
- “Blockchain has no borders,” Binance CEO Changpeng Zhao responded.
- Binance has faced increasing scrutiny from regulators in recent months.
Changpeng Zhao, the CEO of Binance, often known as C.Z., has refuted rumors that the international exchange is considering cutting relations with American cryptocurrency projects.
This was after a Bloomberg report claimed that it resulted from a regulatory inquiry because Binance cannot provide cryptocurrency services to U.S. clients. This is because the Securities and Exchange Commission (SEC), Commodities Futures Trading Commission (CFTC), Department of Justice (DoJ), and Internal Tax Service (IST) are scrutinizing the exchange.
The report stated that Binance is about to cut ties with its American business partners, including intermediaries like banks and services companies. The exchange was also said to be reevaluating American venture capital investments.
It also added that the exchange is considering delisting any projects based in the U.S., including Circle’s stablecoin USD Coin.
In response, C.Z. had stated in a Tweet that the report was “false,” When someone questioned what a “U.S.-based token” actually was, he said:
“Blockchain has no boundaries.”
C.Z. also stated:
“We pulled back on some potential investments or bids on bankrupt companies in the U.S. for now. Seek permission first.”
Increased Regulatory Scrutiny
According to Nansen data projections, Binance has seen a net outflow of $1.9 billion in assets due to increased regulatory scrutiny in recent months.
In just a few days, Binance’s stablecoin BUSD, issued by Paxos, has been subject to a crackdown, resulting in $2.3 billion in token redemptions.
The New York State Department of Financial Services recently issued a directive to Paxos Trust Co., Binance’s stablecoin partner, to halt the issuance of the very successful Binance USD stablecoin.
This follows suit by the SEC instigating Paxos’s breaking of investor protection regulations about BUSD issuance.
The regulator has reportedly written Paxos a Wells Notice, which the commission uses to notify companies of prospective enforcement action. This is according to the February 12 report by the Wall Street Journal from February 12 that cited unnamed people with knowledge of the matter. According to the notice, BUSD is unregistered security.
Besides Binance, other popular cryptocurrency companies have recently been forced to leave the market.
U.S. Regulators vs. Binance
Although Binance does not provide cryptocurrency services to Americans, it does have Binance.US, which bills itself as an independent U.S. partner. The Western District of Washington U.S. Attorney’s Office has investigated the top cryptocurrency exchange since 2018 for failing to register itself there.
According to Bloomerg’s report, the CFTC launched an investigation into Binance in September 2021 to look into allegations of insider trading. The CFTC was already looking into whether Binance had illegally let Americans utilize the exchange at the time.
In response to the report, C.Z. described the news on Twitter as FUD (fear, uncertainty, and doubt).