• Binance.US and CZ have been in the crosshairs of federal regulators over the past few years
  • The CFTC earlier sued CZ and Binance for supposedly operating an alleged 'illegal' exchange
  • In February, the SEC sued stablecoin issuer Paxos, which is behind the Binance stablecoin BUSD

Executives at Binance.US, the American arm of the centralized crypto exchange platform, have long been deliberating on how reducing Changpeng Zhao's (CZ) majority stake could aid in improving the company's image before regulators in the country.

Binance.US and CZ, the founder, chairman and majority owner of the exchange, have been attempting ways and strategies to reduce his stake in the company since last summer, and even before it was sued by a government regulator, The Information claimed in a recent article, citing two people familiar with the matter.

Binance is one of the world's largest crypto exchange platforms in terms of trading volume and its U.S. arm and CEO have been in the crosshairs of federal regulators in the country over the past few years.

Leaders of Binance's U.S. arm talked about how this move could enhance the exchange's standing before U.S. regulators, the report further claimed.

It may be recalled that in March, the Commodity Futures Trading Commission (CFTC) sued Binance and CZ for supposedly operating an alleged "illegal" exchange with a "sham" compliance program. The crypto empire was also accused of evading the law of the country willfully "while engaging in a calculated strategy of regulatory arbitrage to their commercial benefit."

Binance, of course, shut down these accusations and said at the time that it "implemented a robust 'three lines of defense' approach to risk and compliance."

In February, the U.S. Securities and Exchange Commission (SEC) sued stablecoin issuer Paxos, which is behind the Binance stablecoin BUSD, and this resulted in a halt in the minting of the BUSD.

Earlier this year, the SEC also filed a motion to the court, preventing Binance.US to bid for the assets of the bankrupt crypto lender Voyager Digital.

While the court dismissed the SEC's attempt to block the approval, Binance.US later backed out from the $1.3 billion Voyager Digital asset acquisition deal, citing the "hostile and uncertain regulatory climate." in the country.

"Binance.US has made the difficult decision to exercise its right to terminate the asset purchase agreement with Voyager," the crypto exchange said in a tweet.

"While our hope throughout this process was to help Voyager's customers access their crypto in kind, the hostile and uncertain regulatory climate in the United States has introduced an unpredictable operating environment impacting the entire American business community," it added, noting that "we are focused on creating a safe platform where our customers can participate in the digital asset economy."

Executives at Binance.US may have been exploring strategies to offload CZ's stake in the company over worry that the exchange might not be able to obtain regulatory licenses as long as Zhao is still the crypto exchange's majority owner.

Binance.US and CZ have not yet released any statement about the reports that the exchange is reducing the founder's majority stake.

Zhao Changpeng, founder and chief executive of Binance