- Binance France has replaced co-founder Changpeng Zhao with two new shareholders to maintain its operational status in France and comply with local regulations in the European Union’s second-largest economy.
- This unexpected move follows Zhao’s legal issues and is part of a broader effort to align with European Union standards as new regulatory frameworks like the Markets in Crypto-Assets (MiCA) regulation take effect.
- Changpeng Zhao, also known as CZ, previously owned 100% of Binance France. However, following his guilty plea for violating US banking laws last November, Binance needed to restructure its ownership to comply with French regulations and safeguard its operational status in the EU.
Binance France undergoes a significant shareholder restructuring to comply with EU regulations and maintain its operational status amidst regulatory scrutiny.
Change of Ownership in Shareholders of Binance France
Under these regulations, a company’s majority shareholder cannot have a criminal record. Binance has introduced Yulong Yan and Lihua He as the new majority shareholders of Binance France, each holding 50% of the shares. Both are co-founding team members of Binance.
Binance Amid Regulatory Scrutiny
Binance, also the largest shareholder of South Korean cryptocurrency exchange Gopax, recently sold the asset claims of Gopax victims at less than half their face value on May 27, leading to substantial financial losses for investors. This sale contradicted Binance’s earlier promise to fully compensate victims of the ‘GoFi’ virtual asset deposit service, which had suspended fund withdrawals and owed around KRW 70 billion ($52 million).
Instead of using its funds to cover these losses, Binance sold the claims at a discount amid rising cryptocurrency prices, increasing GoFi’s debt to an estimated KRW 100 billion ($75 million). Investor discontent has grown, especially since Genesis, the service associated with Gopax, had its bankruptcy compensation plan approved, committing to return 77% of bond funds to creditors.
Conclusion
Binance’s recent shareholder restructuring in France is a strategic move to comply with stringent EU regulations and maintain its operational legitimacy. However, the company continues to face significant regulatory challenges, both in Europe and globally. The ongoing investigations and financial controversies underscore the complex landscape that Binance must navigate to sustain its market position and regulatory compliance.
