Binance chief executive insists regulation is a positive sign
By Rob Griffin
11:56, 7 July 2021
Binance chief Changpeng Zhao believes the introduction of tougher rules is a positive sign that the cryptocurrency industry is maturing – despite his business being the focus of global regulators.
The founder and chief executive of the crypto trading platform came out fighting in the face of mounting global pressure on his exchange.
In a letter, he said the “recent hyper-focus on regulation” had helped to sharpen the company’s stance, commitment, approach and plans.
While admitting the four-year-old business hadn’t yet got everything exactly right, he said it was “learning and improving” every day.
“We hope to clarify and reiterate our commitment to partner with regulators, and that we are proactively hiring more talent, putting in place more systems and processes to protect our users,” he added.
Regulatory firestorm
Zhao’s comments come after a challenging few weeks for Binance. At the end of June, the Financial Conduct Authority announced that Binance Markets Limited, which it said was a part of the wider Binance group, wasn’t permitted to undertake any regulated activity in the UK.
As we reported, Thai authorities have filed a criminal complaint against Binance, while the business is coming under the gaze of regulators in both the United States and Japan.
Highest standards
Zhao pointed out that the crypto industry was still in its infancy when Binance was launched, with few early adopters and no clear standards.
“Within a short period, the crypto environment has drastically grown and evolved,” he said. “There are now more crypto offerings, an increasing number of first-time crypto users, and a lot more attention and debates on how the crypto industry should move forward.”
However, he insisted Binance had always been focused on setting standards.
“Before there were clear guidelines for the industry, we have always held Binance to the highest standard to prioritise our users’ best interests — a goal that we share with regulators around the world,” he said.
Need for regulation
Zhao said he was seeing wider adoption of cryptocurrencies globally and the need for clearer regulatory frameworks in different countries.
“More regulations are, in fact, positive signs that an industry is maturing, because this sets the foundation for a broader population to feel safe to participate in crypto,” he said.
“I believe a well-developed legal and regulatory framework in the long term will be a solid foundation that truly makes crypto essential in everyone’s daily life,” he added.
Future plans
Zhao, who branded compliance “a journey” and pointed out the industry still had a lot of uncertainty, also outlined the steps Binance was taking.
These included growing its international compliance team and adding appointments such as Rick McDonell, the former Financial Action Task Force (FATF) executive secretary, and Josée Nadeau, former head of the Canadian delegation to the FATF.
“We plan to double our team size by the end of the year, with qualified and experienced advisers to support,” he added.
Zhao is also looking to expand compliance partnerships and localise operations in order to comply with local regulations.
He pointed out that regulators have taken a more active interest in the industry as a whole over the past four years.
“We welcome this development, however, there is still much to do to harmonize the treatment of cryptocurrency around the world,” he said. "We aim to continue our efforts in working with regulators collaboratively to meet their concerns as the industry continues to grow.”
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