Key Points:
- Binance France replaced Changpeng Zhao with Yulong Yan and Lihua He as shareholders to comply with local regulations.
- The move follows Zhao’s guilty plea for violating US banking laws and aligns with the EU’s upcoming crypto regulations.
In a strategic move to retain its operational rights in France and the wider European Union, Binance France has replaced co-founder Changpeng Zhao with two new shareholders, DL News reported.
Binance France Replaces Changpeng Zhao Amid Compliance Efforts
This comes as a response to Zhao’s guilty plea last November for violating US banking laws, which put into jeopardy his status as the sole owner of Binance France under local regulations that bar majority ownership by individuals with criminal records.
The European Union’s forthcoming Markets in Crypto-Assets Regulation (MiCA) allows for the transfer of licenses across member states, but keeping Zhao would have compromised Binance‘s compliance. The replacement is made to secure Binance’s status as the largest crypto exchange in Europe as new laws come into effect at the end of the year.
A Binance spokesperson said that the new shareholders, Yulong Yan and Lihua He, both hold 50% of Binance France. Yan, also known as Allan Yan, was among the people involved in Binance’s early development and is mentioned in its original whitepaper. He previously co-founded Bijie Tech, a Chinese exchange services company that was shut down by the Chinese government in 2017. Lihua He, though not mentioned in the 2017 whitepaper, has taken up the mantle in the company.
Ongoing Legal Challenges and Future Compliance Uncertainties
This change in ownership is part of a wider “global restructuring project” that Binance is undertaking to ensure compliance with regulations. Following Zhao’s conviction, Binance France received a notice from the French Financial Markets Authority (AMF) in December, requiring it to make operational changes.
Binance has invested heavily in the French market, contributing €100 million to the local crypto industry in 2021 and frequenting events in Paris. Yet, the company continues to be under investigation related to potential money laundering and unregistered advertising.
As Binance negotiates through the raft of these challenges, its compliance with MiCA regulations remains uncertain, especially as new stringent rules are set to be enforced in 2025.