Binance has stated its continued commitment to collaborating with regulatory bodies, and relevant law makers. In an exclusive statement to coinfractal.com, the world’s largest cryptocurrency exchange emphasized its promise to – in collaboration with relevant stakeholders – help shape policy that will grow the digital assets ecosystem.
The statement follows a rather rocky fortnight, for the digital assets trading platform operator – reputation-wise – as a slew of financial watchdogs, across the globe, brought the question of where the world’s biggest cryptocurrency exchange is headquartered back into the spotlight. The latest nations to drive a dagger into Caesar, are Thailand, and the Cayman Islands.
Thailand’s financial watchdog, at the open of July, took legal action against the Changpeng Zhao headed crypto trading platform, on the grounds that Binance was operating a crypto-based service within the territory sans authorization. This, a few days after Japan’s financial industry overseer issued a warning to local investors, declaring binance to be an unlicensed entity.
In addition to being dogged by legal drama from a number of Jurisdictions, Binance has also attracted the attention of US financial officials. The Justice Department, as well as the Commodity Futures Trading Commission (CFTC) have also recently been reported to be looking into Binance’s dealings within the respective territory.
A Decentralized Company
An adage that has been repeated, time and again, by Binance chief whip, Chengpang Zhao (better known as CZ) is that the digital assets firm is a ‘decentralized company’. What the statement means is that Binance is a company with no headquarters, much like a blockchain project.
Binance CEO, CZ, in an open letter published on the 6th of July, made an effort to point out the firm – although currently in in regulatory hot water – is very keen on collaboration with revelant authorities, in putting together a sound set of regulations regarding the crypto industry. “Compliance is a journey,” stated Zhao “especially in new sectors like crypto. The industry still has a lot of uncertainty. We also recognize that with the growth comes more complexity and more responsibility.”
This seems to be at the heart of the dispute with regulators, as one usually requires a registered headquarters to be considered for regulatory approval. CZ – on the other hand – seems to be of the opinion that a decentralized firm doesn’t necessarily need one “Well, I think what this is is the beauty of the blockchain, right, so you don’t have to … like where’s the Bitcoin office, because Bitcoin doesn’t have an office.
Binance does, however, maintain a few regional offices in some of the major territories in which it operates.
Binance appears to be making some efforts towards regulatory compliance, in that, the firms’ global complaince team has ggrown five times in the past year, which includes hires from the Financial Action Task Force, among other regulatory bodies. The crypto trading platform has also been actively setting up AML procedures, and working in connection with blockchain data analytics firm, Ciphertrace in an apparent bid to sure up platform security.
Going Forward?
“We take our legal obligations very seriously and engage with regulators and law enforcement in a collaborative fashion. As the cryptocurrency ecosystem continues to grow and evolve, we are committed to working with regulators and policymakers to shape policies that protect consumers, encourage innovation, and move our industry forward.” – statement by Binance spokesperson.
The above comment from Binance, came shortly after CZ reiterated the firm’s commitment to remaining on the right side of the compliance question, as the incumbent financial system figures out how to interface with the cryptographic economy. Binance appears to be holding true to their operational policy, as the exchange – on June 27th – announced that it was withdrawing its services from the Canadian province of Ontario, a week after derivatives exchange, ByBit, was found to be non-compliant with local regulatory requirements.
“As part of our continuing compliance efforts, we are updating our Terms of Use to ensure that Ontario (Canada) has become a restricted jurisdiction. Regrettably, we can no longer continue to service Ontario-based users. We have advised Ontario-based users to close out all active positions. [These users will have until the end of the calendar year to withdraw their funds.]” – Binance spokesperson
The world’s biggest cryptocurrency exchange, by trading volume, may have quite the task cut out for it, going forward. Expecting regulators to trust a firm with no known HQ seems like a tall order, as this goes against the grain of everything incumbent financial system players believe in.
Should regulatory approval come about from Binance’s efforts, a new precedent will have been set, opening up opportunities for a decentralized operational model to develop. With the world going “work from home” it may actually prove to be an attractive way to build companies in future.
