Binance is aiming for an IPO for its US division after an unsuccessful VC deal and the resignation of its CEO
and why investors balked. https://www.nytimes.com/... Emily Flitter / @flitteronfraud : SCOOP: @BinanceUS is trying to raise outside $$$ as part of a plan to eventually go public, but the going is hard. Here's why @BrianBrooksUS and Manny Alvarez quit two weeks ago https://www.nytimes.com/... Dark Crypto Lady / @darkcryptolord : YIKESSSSSSSSSSSS “Existing users who have yet to complete Intermediate Verification will have their account permissions temporarily changed to “Withdraw Only”, with services limited to withdrawal, order cancellation, position close, and redemption.” https://twitter.com/... Emily Flitter / @flitteronfraud : I hadn't really written about #Crypto since the Mt. Gox/Silk Road days (I happened to be the one who told Ross U's mom that he'd had been arrested), so writing about @binance was a bit of a trip down memory lane. But there were no big VC deals back then https://www.nytimes.com/... Kyle S. Gibson / @kylesgibson : .@BrianBrooksUS on May 19: “https://binance.us/ has a truly arms-length relationship” ... “That's a very, very different thing from them owning us, which they don't” CZ owns 90% of https://binance.us/ https://www.nytimes.com/...
Context & Ripple Effects
This August 2021 scoop captures the moment Binance.US's legitimacy strategy stalled: the division sought outside funding as part of an eventual IPO plan, but investors balked, and its two most regulator-credible leaders — former OCC chief Brian Brooks and Manny Alvarez — resigned within weeks of joining. CZ retained a 90% stake, meaning the money question and the control question were the same question.
The arc since then validates the investors' hesitation: sources later [[a:972860|pegged Binance's potential value at $300B if it goes public even as its unfettered growth drew global scrutiny]], and in June 2023 [[a:840762|the SEC sued Binance and Changpeng Zhao for allegedly mishandling billions in customer funds]] — including court-documented claims that over $12B in customer assets moved to CZ-controlled entities between 2019 and 2021, the very period covered here.
First-order effects
- With the venture round dead, Binance.US enters its IPO push wholly dependent on CZ's 90% ownership and without the Brooks/Alvarez credibility that was supposed to make it palatable to American institutions.
- Unverified users are immediately downgraded to withdraw-only permissions pending Intermediate Verification, thinning active trading on the platform at the exact moment it needs volume to justify a valuation.
Second-order effects
- Governance concentration deepens the conflict-of-interest structure the Washington Post later documented — Binance trading on its own exchange with little accountability to customers — making institutional counterparties more, not less, hesitant.
- US-regulated rivals gain a sales pitch: Binance.US's verification friction and leadership churn let compliant exchanges compete for skittish institutional flow on trust rather than fees.
Third-order effects
- The episode foreshadowed the core dilemma confirmed by the SEC suit: an IPO demands the disclosure and custody transparency that the offshore, lightly-regulated growth model — and the alleged 2019–2021 fund redirections — were structured to avoid.
- If public-market diligence becomes the gate for US crypto scale, the industry consolidates around exchanges that can survive audit-grade scrutiny, marginalizing platforms whose legitimacy rests on a founder's stake rather than independent governance.
The trend: Crypto exchanges are learning that public-market legitimacy requires the custodial transparency their rapid, lightly-regulated growth phase was built to sidestep.