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Binance.US Vs SEC: Deuce
The appointment of former SEC lawyer Norman Reed better positions the exchange for the fight that faces it.
Following the surprise departure of Brian Shroder as head of Binance.US, Norman Reed has been announced as new CEO.
This is a development of potentially huge significance. Binance.US is mired in legal battles on multiple fronts, against the SEC, CFTC, and likely DOJ. The crypto community has actively been speculating that the organization (and with it, Binance CEO Changpeng Zhao) is in real trouble.
The new appointment suggests a different picture.
Promotion From Within
As CZ notes, Norman Reed has an impeccable pedigree in both the crypto and legal worlds. He has been at Binance.US as General Counsel since 2021, meaning this is a promotion from within the organization (i.e., someone who already knows their way around, including where the skeletons are hidden). However, he has extensive experience with other crypto companies and regulators, and has served in numerous high-profile positions, as his LinkedIn history shows—including General Counsel at Ripple, Senior Enforcement Attorney at the Federal Reserve Bank of New York, and Special Counsel in the Division of Market Regulation at the SEC, among many others.
All in all, this is an appointment that looks great. Reed's promotion is clearly designed to project a commitment to competence and compliance, at a time when Binance.US is under fire from regulators—with a former regulator at the helm, they stand a better chance of winning both the legal battle, and the battle for hearts and minds.
All of this places a different complexion on the departure of Brian Shroder, whose background is in business, not law. He, and around a third of Binance.UK employees, have left in recent weeks. While this is largely a cost-cutting exercise, in Shroder's case it may be that he was not the right man for the job at this time, and the unique challenges it poses.
We don't know this, but it makes sense. Shroder was the right person to grow Binance.US into the giant of the crypto space it has become, but that success came at a price—namely, attention from the wrong people, possibly exacerbated by some corners that were cut in the pursuit of growth. Reed is clearly far better equipped to deal with the current challenges. CZ may simply have retired Shroder in favor of Reed, as the necessary next move.
CZ has not said as much. But it's possible that his relative silence on the matter reflects gratitude for Shroder and a desire, born of decency, not to throw him under the bus. That's a very different narrative than the one elements of the crypto community are suggesting, like Shroder leaving voluntarily because Binance.US was such a hotbed of criminal activity and compliance abuses.
Of course, there are other opinions about CZ's honor.
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