Citing ‘strategic differences,’ the former Treasury Department official’s announcement comes as the global Binance exchange is under scrutiny from regulators throughout Europe and Asia.
Brian Brooks’ shocking Friday afternoon resignation as CEO of Binance.US after barely three months on the job has redoubled attention on the regulatory troubles that have buffeted its international namesake in recent months.
A former Coinbase general counsel, Brooks won the affection of the entire crypto community from his position as the U.S. banking regulator, where he instituted a number of very important policies, notably allowing banks to custody cryptocurrency and use stablecoins to settle transactions.
The announcement brought forward industry suspicions about the independence of Binance.US — which claims it is entirely separate from the global Binance exchange, simply licensing its technology and sharing a majority owner in Changpeng “CZ” Zhao.
While the phrase “strategic differences” in C-suite resignation announcements often leads to attempts to parse what is really going on, in Brooks’ case there may have been real ones.
Arguing that “the exchange business is not a profitable, long run business,” Brooks pointed to the way Robinhood forced the main stock trading firms like Charles Schwab to stop charging fees.
“Coinbase’s biggest risk is that it charges a 2% trading fee and Binance.US charges a 10 basis point trading fee,” he said. “But why would anyone pay 2% for the privilege of buying and selling their own assets, their own money, when they could come to my exchange and do the exact same thing?”
The future of crypto, he predicted, “isn't more people offering trading services like Robinhood and PayPal. The future of crypto is building decentralized applications that add value to people's lives.”