Binance pulls out of potential US investment, CEO Zhao confirms

Binance has pulled out of some potential investments in the United States, its CEO Changpeng Zhao said on Friday, following a Bloomberg report that the major crypto exchange was considering ending relationships with American business partners.

“For now, we have withdrawn some potential investments or offers for bankrupt companies in the US. Seek permission first,” Zhao wrote in a tweetwithout specifying.

The Bloomberg report, which cited an unnamed person familiar with the matter, said Binance is considering ending business relationships with banks and service firms in the United States, amid heightened regulatory scrutiny of the company.

Binance is also reevaluating US venture capital investments and will consider removing tokens from all US-based projects, including the main stablecoin USD Coin, the report said.

The announcement that Binance may abandon its US partners comes a day after Reuters reported that global exchange Binance, which is not licensed to operate in the United States, secretly transferred more than $400 million (almost Rs 3,310 crore) from accounts held from its supposedly independent US partner. That money, according to the company’s reports, was transferred to a trading firm run by Binance CEO Zhao.

“Like any other blockchain company, we conduct a careful cost-benefit analysis and will direct our business as necessary to protect our global user base,” a Binance spokesperson said. The company did not immediately respond to questions about which US investments Binance had pulled out of.

US regulators have stepped up scrutiny of crypto companies this year. The regulatory action comes after numerous crashes in the crypto sector last year, which led to the collapse of a number of major players in the industry in the United States and beyond.

On Monday, New York’s top financial regulator ordered the company behind the Binance stablecoin to stop issuing the token.

Earlier this month, Binance said it had stopped all bank transfers in dollars after a US banking partner, Signature Bank, returned exposure to crypto firms.

© Thomson Reuters 2023