Binance France has swapped out its co-founder, Changpeng Zhao, for two new shareholders. The former CEO can’t be a beneficiary of Binance if he wants to keep his French license. This move follows a warning from the country’s Financial Markets Authority (AMF) in December. Now, Binance France has new shareholders, each of whom owns 50% of the company.
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In recent years, France has been a key strategic hub for Binance in Europe. Binance invested €100 million into the French crypto industry in 2021. Binance executives headlined events in Paris, and government officials warmly welcomed Binance to the French capital.
Zhao owned 100% of Binance France, the crypto company’s main hub in the EU. However, after pleading guilty to violating U.S. banking laws last November, French law stipulates that a majority shareholder of a company cannot be a criminal.
Lifting the Curtain on the New Shareholders
Binance France has kept mum on the names of its new beneficiaries but did mention that both are from Binance’s founding team. However, a peek into the official French business registry reveals that the shares of Binance France are now split between Yulong Yan and Lihua He, each holding 50%.
Yulong Yan, who also goes by the English name Allan Yan, is listed as a team member in Binance’s original white paper. Yan co-founded and served as the Product Director of the now-defunct Chinese exchange services company Bijie Tech.
Lihua He’s name, on the other hand, doesn’t appear in Binance’s original 2017 white paper.
A Binance spokesperson declined to provide further information about this shareholder and did not immediately respond to questions regarding whether Zhao received any compensation for his shares.
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Restructuring for the Future Compliance
Keeping Zhao in his role would have jeopardized the company’s standing in France and, by extension, in the European Union, especially with a new landmark law coming into effect at the end of the year.
The change in ownership is part of a “global restructuring project” that Binance is rolling out this year. In a blog post published on Tuesday, Binance announced that its French subsidiary made these changes to ensure compliance with the regulations for digital asset service providers in France.
The Markets in Crypto-Assets (MiCA) regulation allows companies to “passport” their license from one home country to the other 27 EU countries. The new regime, expected to take effect within the next two years, aims to boost investment in the digital assets industry across the continent. This means companies like Binance need to select one country in which to apply for a license.
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However, Binance is also facing two investigations by prosecutors focused on potential money laundering and advertising to the public before being registered with the regulator.
The shareholder swap is the latest sign that Binance is trying to turn the page on the Zhao era, which hit a dead end last November when Binance pleaded guilty to violating U.S. banking laws. Coupled with Zhao’s conviction, legal experts are uncertain whether regulators will approve Binance’s license under MiCA.
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