Connect with us


Funding Round For Binance US Fails Due To Regulatory Matters

Concerns with regulation surrounding Binance US have, according to reports, ended in investors exiting a funding round worth 100 million USD. The unsuccessful funding round also led to Binance US chief Brian Brooks’ unexpected decision to resign after acting as its executive for a mere three months.

Brooks, who was the chief legal officer and Acting Comptroller of the Currency to competing exchange Coinbase, alluded to strategic differences after leaving office. The funding round was meant to be the first step in the platform’s direction towards an IPO (or initial public offering).

Brooks had initially encouraged potential investors under guarantees that Binance US would be compliant with all US regulatory standards, according to what The New York Times reported. These investors included Ray Lane from equity capital company GreatPoint and an executive from Japanese investment trust SoftBank.

The investors, however, exited due to apprehensions around Binance chief Changpeng Zhao’s 90 per cent possession stake in Binance’s United States-based exchange, aside from worries regarding an ongoing investigation at the hands of US authorities, that is, according to reports, inspecting Binance based on tax and money laundering problems.

The New York Times has also stated that a lacking clear-cut separation between Binance and Binance US also caused investors to get concerned.

Brooks took to Twitter on the 7th of August to publicly announce his resignation. A Binance US representative stated that the firm would, nonetheless, gradually move towards its goal of fulfilling an IPO in the US.

An IPO obtained from Binance US would further strengthen the exchange’s foothold, making it more capable to contend with Coinbase, which had finalized its IPO earlier on the 14th of April.

Zhao had anticipated for the investment round to enable Binance US to improve its reputation among US regulators to let the IPO move forward.

In spite of recent problems, Zhao is still adamant that Binance US will be successful in attracting the investments it needs to acquire an IPO. He stated in an interview with Bloomberg that top-level investors are still interested.

Binance has been experiencing regulatory pressure in a variety of jurisdictions throughout recent months. The FCA (or the Financial Conduct Authority) in the UK had demanded Binance stop all its regulated operations in the UK at the end of June 2020. As a result of that, renowned banks such as HSBC UK have discontinued credit purchases made to Binance.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

More in Crypto

Dogecoin News Hub