Binance France has undergone significant restructuring as it aims to ensure compliance with regulatory standards in the European Union. The decision, disclosed by the company today (Tuesday), involved the replacement of Co-Founder Changpeng Zhao with two new shareholders.
Restructuring Ownership amidst Regulatory Compliance
The move comes amidst efforts to safeguard Binance's operations in France, the second-largest economy in the EU, where regulatory frameworks mandate that the majority shareholder of a company must not have a criminal record. Zhao, who previously held 100% ownership of Binance France, pleaded guilty to breaching US banking laws in November.
In compliance with French regulations, the new shareholders of Binance France are identified as Yulong Yan and Lihua He, each holding a 50% stake. Yan, also known as Allan Yan, is a familiar figure within the cryptocurrency sphere, having been associated with the founding team of Binanceand previously serving as a Co-Founder and Product Director at Bijie Tech, a now-defunct Chinese exchange services company.
On the other hand, He's background is less transparent, with no mention in the original Binance whitepaper published in 2017. Binance declined to provide further details regarding this shareholder, including whether Zhao received compensation for relinquishing his shares.
BINANCE FRANCE DUMPS CZ AMID HOPES IT WON’T BE SHUT DOWN IN EUROPE- @Binance France has replaced its founder @CZ_Binance with two new company shareholders, owing to European regulatory pressure.- French regulations enforce that a company’s majority shareholder cannot be a… https://t.co/OVN15EIdqt pic.twitter.com/FJ7jrXFZzB
— BSCN (@BSCNews) May 28, 2024
Evolution in Compliance and Leadership
The shareholder reshuffle reflects broader efforts by Binance to transition away from the Zhao era, which culminated in legal repercussions for the company and its former CEO last year. Following a guilty plea for facilitating illicit transactions, Binance incurred a substantial fine and pledged to implement stringent anti-money laundering measures, alongside a change in leadership.
Richard Teng, a former regulator with the Singapore Central Bank, assumed the CEO position in late 2023. The ownership restructuring is positioned within Binance's larger "global restructuring project" underway this year, as stated in a recent company blog post.
In response to regulatory pressures, Binance France has taken steps to align with the regulatory landscape, particularly in anticipation of the Markets in Crypto-Assets regulation (MiCA). MiCA is set to introduce comprehensive regulatory standards for digital asset service providers across the EU, with implications for licensing and operational frameworks.
This article was written by Tareq Sikder at www.financemagnates.com.
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