Binance, the largest cryptocurrency exchange in the world, has been suffering from regulatory pressure from more than one jurisdiction. CEO Zhao Changpeng is now saying that his exchange needs to become a licensed financial institution in order to pacify regulators.
After a few months of regulatory hits, Binance now aims to build itself into a licensed financial institution with a centralised headquarters. In an article on the South China Morning Post, Zhao Changpeng (CZ) spoke of how his company would become more palatable to regulators globally.
“As we run a centralised exchange, we have come to realise that we need to have a centralised entity to work well with regulators. We need to have clear records of stakeholders ownership, transparency and risk controls.”
However, this is not going to be an easy feat to accomplish as Binance is spread across a few locations. Also, by pleasing the regulators, the exchange may well upset many in the crypto community who believe that centralisation is anathema to the philosophy of cutting out the middleman by decentralisation.
For CZ though, Binance is bowing to the inevitable. Regulation is coming whether the crypto industry wants it or not, and perhaps far better to prepare for it than to pretend it might never happen.
“As the largest player in the industry, we need to prepare ourselves for the shift. We are making changes to make it easier to work with regulators,”
Binance has been hiring some high-profile figures to this end, which include the likes of Brian Brooks, the previous US acting comptroller of the currency. Sadly though, he resigned after just three months in his post.
Just recently, Binance hired Richard Teng as the CEO of its Singapore arm. He was the former director of corporate finance at the Monetary Authority of Singapore (MAS). The aim here is to attain a payment services license.
On the on-going Bitcoin experiment taking place in El Salvador, CZ was very upbeat, saying:“Many regulators are concerned about countries that do have a national currency, but smaller countries are probably better off in not having a national currency. With finite supply of 21 million and the immutable nature of blockchain, bitcoin possesses a lot of properties of a hard currency that support its use as a national currency.”
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