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The largest cryptocurrency exchange in the world still lacks support in the United States – In seconds Panama

Cryptocurrency firms, which have already had disagreements with US regulators, have begun mounting a counteroffensive by hiring lobbyists and attracting ex-regulators to their side, including former SEC Chairman Jay Clayton.

In order to gain legitimacy in the United States, Binance.com, the world’s largest cryptocurrency exchange, is seeking to conduct an initial public offering of its US division. However, for a company that relies on secrecy, as is often the case for cryptocurrency firms, things could be slow and erratic.

This month Brian Brooks, CEO of Binance.US, left the company just three months after taking office, citing “strategic differences.”

Changpeng Zhao, the Chinese-Canadian billionaire who owns Binance.com, had hired Brooks, a former regulator, to help the company gain support in the United States. Brooks left after a venture capital investment he was managing for Binance.US collapsed. The deal would have been the first step to a possible IPO, but some investors objected to the amount of control Zhao was going to exercise over Binance.US.

Companies that transact in digital currencies are trying to grow. Many cryptocurrency firms, whose founders are often lone programmers who go around the world with their laptops, are restructuring to become more traditional entities with audited boards of directors and financial reports. Some are gearing up for a larger presence in the United States, a lucrative market where hordes of customers are already flocking to their platforms, just as suspicious authorities have begun to pay close attention to them.

In a recent speech, Gary Gensler, chairman of the Securities and Exchange Commission (SEC), referred to this area as “the Wild West.”

“This asset class is plagued by fraud, scams and abuse in certain applications,” he said. “There is an excess of publicity and propaganda about how crypto assets work. In many cases, investors cannot obtain accurate, balanced or complete information ”.

The initial public offering by Coinbase, a San Francisco-based crypto exchange, which allows its clients to trade digital currencies for real currencies and vice versa, this spring has given rivals a scheme, as well as a glimpse of the money being traded. You can win. This month, Coinbase reported a profit of $ 1.6 billion in its second quarter as a public company.

“Fundraising and engaging potential investors is an essential part of Binance.US’s long-term strategy,” Hazel Watts, a Binance spokeswoman, said in an email.

Watts said the company planned to dilute its ownership significantly by bringing in more outside shareholders.

“The original plan was just to dilute a small portion,” he noted.

Zhao, who is known as “CZ” and lives in Singapore, created Binance.US in 2019 as a first step to appease US regulators, who were unwilling to allow their US clients to transact on Binance.com. Right now, Zhao owns most of Binance.com and Binance.US. Brooks came to the company in April with a mission to build a legitimate and transparent business, starting with diversifying its ownership structure through a venture capital investment in Binance.US.

Brooks, a former regulator who briefly headed the Office of the Comptroller of the Currency – which oversees the nation’s major banks – during former President Donald Trump’s tenure, was already familiar with the cryptocurrency industry as a director. Coinbase Legal.

Brooks had a hard time establishing that Binance.com and Binance.US are separate entities despite their common owners. Brooks commented in an interview with Bloomberg on May 19 that there is “a good distance” between Binance.US and the other company, as they share the Binance brand and some technologies, but operate independently.

“That is something very, very different from being our owners; they are not, ”he said.

Brooks was looking to raise at least $ 100 million from investors, according to Ray Lane, a longtime tech executive who is now a venture capitalist in San Francisco. Lane said his firm, GreatPoint Ventures, had never made an investment in cryptocurrencies, but that when his partner Andrew Perlman, to whom Brooks had proposed the idea, suggested they invest, Lane agreed to consider it. A senior SoftBank executive also entertained the idea of ​​making a personal investment in Binance.US, but ultimately decided against it, a SoftBank spokesperson said.

GreatPoint started discussions with Brooks about a partial investment in Binance.US. Investors were initially reassured by Brooks assuring them that Binance.US would operate independently of Binance.com and comply with all US regulations. That oversight by the United States was at some point going to demand more requirements than were already being met: monitoring the identities of its clients, reporting suspicious activity to federal authorities, and ensuring that its services were not used to commit crimes.

However, because US authorities were investigating Binance for money laundering and tax issues, according to a Bloomberg report, as Zhao owns around 90 percent of Binance.US, GreatPoint decided not to invest.

“We were going to have to make an investment decision before all of these issues were resolved,” explained Lane.

Furthermore, Lane and his partners found the walls separating Binance.US from its parent company to be flimsy. “How could we feel comfortable that it is an independent company if it uses the same technology?”

Around the time GreatPoint was contemplating making an investment, Brooks was looking to shore up Binance.US ‘regulatory abilities.

Cryptocurrency firms, which have already had disagreements with US regulators, have begun mounting a counteroffensive by hiring lobbyists and attracting ex-regulators to their side, including former SEC Chairman Jay Clayton.

In early July, Binance.US announced that it was hiring as managing director Manuel P. Álvarez, a former legal control attorney with the Consumer Financial Protection Bureau, who later served as California’s top banking regulator. But when GreatPoint left the talks to reach an agreement, both Brooks and Alvarez resigned.

In a statement, Joshua Sroge, interim CEO of Binance.US, announced that the company still has growth plans, including external fundraising and “expanding its board of directors with experienced leaders, among other initiatives consistent with the pursued by fast-growing private companies ”.

Tammy Sewell is our Writer and Social at OICanadian.com. Tammy loves sports, she writes our celebrities news. She spends time browsing through several celebs news sources as well the Instagram. Email: Tammy@oicanadian.com Phone: +1 513-209-1700

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