Binance CEO Hints at Hiring His Own Replacement as Regulators Circle
Binance CEO Changpeng “CZ” Zhao strongly hinted last week that he is looking to hire his own replacement as the next CEO of the largest crypto exchange in the world.
“Right now I’m actually looking for a senior person with a strong compliance background, with a strong regulatory background to lead the entire organization, maybe become the new Binance CEO,” CZ said. “I’m a tech entrepreneur, I’ve led the company for four years and it’s good, and we’ve got to go through this pivot. I don’t think I’m the best person to lead that effort. I think having somebody with a very strong regulatory background is actually better.”
His comments came at a virtual summit in conversation with Mukaya Panich, chief investment officer at SCB 10X, the venture arm of Thailand’s Siam Commercial Bank. In the same interview, he discussed his aim to take Binance US public.
Binance has made a series of high-profile hires in recent months, some of which have come in the wake of the exchange’s fraught dealings with many of the world’s financial services regulators. In April, it named former U.S. financial regulator Brian Brooks the new CEO of Binance US, a move seen as an effort to make good with lawmakers; earlier this month, it hired Jonathan Farnell, formerly of eToro, as Binance’s new director of compliance.
Is CZ preparing to jump ship?
CZ’s previous rhetoric on regulation has been an interesting journey.
In April of this year, CZ spoke about the crypto industry’s broad relationship with regulators during a session on Clubhouse. “If I was the regulator, the most logical thing I would do is to look at the existing regulations in the traditional financial space and bring them into crypto,” CZ said at the time.
One of the most basic and commonplace tenets of those “existing regulations” is for companies to be licensed to operate in the jurisdictions where they do business. But CZ has never made it clear where Binance is headquartered, arguing repeatedly that the company is truly decentralized with no headquarters, and that nobody nowadays agrees on one definition of a corporate headquarters anyway.
“Everybody’s definition of a headquarters of a company is slightly different. When you ask how you define headquarters—is that an office where people sit? I worked from home for the last three and a half years,” he told Decrypt during this year’s Ethereal Virtual Summit.
That way of thinking might find favor among crypto enthusiasts who are naturally quite inclined to appreciate the values of decentralization. But it has not found favor with the world’s regulators.
In the U.K., a Financial Conduct Authority spokesperson told Decrypt that the regulator has a “huge issue” with Binance’s apparent lack of a headquarters.
In recent months, Binance has also fallen foul of regulators in Italy, Japan, and the Cayman Islands. The exchange has also been dealt blows by banks, payment processors, and even rival exchanges like FTX, which bought out Binance’s shares in an obvious move to distance itself from the exchange.
It is unclear whether CZ has concrete plans to step down from Binance soon. Decrypt has reached out to Binance for further comment. But if CZ does step back from the top job at the massive business he founded, his successor will have plenty on their plate and will have to prioritize engaging with lawmakers.
27 July 2021 14:30