Binance CEO: ‘I Would Bring Traditional Financial Regulations To Crypto’

[LazY]

The CEO and founder of crypto exchange Binance, Changpeng Zhao (“CZ”), said that regulation is not necessarily a bad thing for the crypto industry.

“If I was a regulator, the most logical thing I would do is to look at the existing regulations in the traditional financial space and bring them into crypto,” CZ said, before noting that the crypto industry is significantly different from traditional finance.


The Binance CEO also added that he was not—unlike many others in the industry—a libertarian or an anarchist. “There are many extreme libertarians that believe we have functioned well without any rules, without any government intervention,” he said, adding, “I don’t think as a society we are quite ready for that, at least in my view, I don’t know how we’ll keep ourselves safe.”

Binance’s relationship with regulators
Binance has a complicated relationship with regulators and has thrived (so far) by skillfully navigating cryptocurrency regulations. 

Binance left China in 2017 ahead of the government’s crackdown on crypto exchanges. It went to Japan, then to Taiwan, and then in 2018 Binance courted the Maltese president to make the most of the country’s lax crypto regulations. But the spark faded and Binance had to go elsewhere. Now the company, officially registered in the Cayman Islands, operates from...who knows?

Binance CEO CZ on How to Navigate Regulatory Minefields
In July of last year, the Malaysia Securities Commission alleged that Binance operates in the country illegally. A spokesperson declined to comment to Decrypt at the time, but Binance’s support staff happily told us that all systems are go in the country and we needn’t be troubled by the allegations.

“We don’t have one monolithic system developed by thousands of people in my office,” CZ told Decrypt last November, when asked about how he handles regulatory minefields. Later that month, The Block reported that Binance’s Shanghai office was shut down in 2019 following a visit by authorities. Binance later claimed that it wasn’t an office; The Block claimed it was, citing interviews with employees.

During Decrypt’s November 2020 interview, CZ described regulations as “overly restrictive,” but today, CZ said that it would be “OK” if the first set of crypto regulations “around the world” are “somewhat restrictive.”

“Having no rules is also not good for businesses,” CZ said, adding, “I know other businesses in the industry that want to have a collaborative relationship with regulators.” 

During today’s Clubhouse session, Decrypt asked CZ to provide an update on the US Commodity Trading Futures Commission’s (CTFC) investigation into Binance for allowing American traders to place trades that violate existing US regulations. CZ declined to comment.

Binance CEO: ‘I Would Bring Traditional Financial Regulations To Crypto’
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[Fenix]

For cryptocurrency to move freely in a society that is governed by states, there must be general rules for its circulation established by the states. We will come to this gradually, no matter how much we want it. Therefore, government regulation of cryptocurrency is inevitable. The only question is what it will be. Of course, states will not provide significant benefits to cryptocurrency, given that decentralized cryptocurrency is unacceptable for them, one should expect even some restrictions in its circulation.

[Gravatai]

Cryptocurrencies have reached such a spread that it is impossible to simply ignore them, so naturally, sooner or later, they will begin to be controlled in the same way as other financial assets. But I think that now it is easier to recognize cryptocurrencies not as money but as an intangible value and apply the same legislative instruments to it.