Binance US’s $100 million funding round falls through amid regulatory concerns

Regulatory concerns surrounding Binance.US and its owner Changpeng Zhao (CZ) reportedly led investors to exit a $100 million funding round.
The failed funding round also prompted Binance US CEO Brian Brooks to abruptly step down after just three months in office.
Brooks, a former acting comptroller of the U.S. Currency and former chief legal officer at Coinbase, cited “strategic differences” in his departure. The funding round was originally intended to be the first step toward an initial public offering (IPO) for Binance US.
Brooks initially courted potential investors, including Ray Lane of venture capital firm GreatPoint and an executive at Japanese holding company SoftBank, with assurances that Binance US would comply with all U.S. regulatory guidelines, according to The New York Times.
However, investors reportedly pulled out due to concerns over CZ’s 90% ownership of the Binance US exchange and the ongoing money laundering and tax investigation of Binance by U.S. authorities.
The New York Times also reported that there was a lack of clear distinction between the operations of Binance and Binance US, which raised concerns among investors.
Brooks publicly announced his resignation on Twitter on August 7. A spokesperson for Binance US said the company will continue to take steps toward its goal of completing an IPO in the United States.
Binance US’ IPO will put the exchange in a stronger position to compete with Coinbase, which completed its own IPO on April 14. CZ hopes that this round of investment will give Binance US a better footing with US regulators to allow the IPO to proceed.
Despite its recent troubles, CZ still seems confident that Binance US will be able to attract the investment they need and conduct an IPO. He stated in an interview published by Bloomberg on August 19 that “top” investors are still interested, adding:
“Binance US is aiming to do an IPO in the near future…it’s just a matter of time.”
In recent months, Binance has faced regulatory pressure in multiple jurisdictions. At the end of June, the Financial Conduct Authority (FCA) of the United Kingdom asked Binance to stop all regulated activities in the United Kingdom. Due to the FCA's requirements, major banks including HSBC Bank UK have cut credit purchases to Binance.
Binance ceased operations in Ontario in June after the Ontario government took a hardline stance against cryptocurrency trading. Cryptocurrency exchanges Bybit and Kucoin have also come under fire from Canadian provincial lawmakers.
Additionally, Binance decided last week to remove support for the Korean won and suspend Korean language support as South Korea prepares to tighten crypto regulations.
On July 3, the Thai Securities and Exchange Commission also filed a criminal complaint against Binance, alleging that it illegally operated a digital asset business in Thailand. It is reported that the Thai Securities and Exchange Commission had issued warnings several times, but the exchange ignored them. (Cointelegraph Chinese)