Changpeng Zhao: Binance abandons its ‘decentralised’ business model

The Bitcoin exchange Binance is transforming into a licensed, centrally run enterprise, facing regulatory challenges. This was stated by founder and chief executive Changpeng Zhao in an interview with South China Morning Post.

He acknowledged that the idea of a decentralised global business would hinder regulatory approval in jurisdictions with clear licensing regimes.

“Four years ago, when this all started, we wanted to adopt such a model and have decentralised teams across the globe. But most of our business is a single exchange. Now we have come to understand that, for regulators, we need to be centralised,” Zhao said.

He said that the mere fact that the company cannot state a headquarters has already been a negative signal to regulators.

“Regulators usually ask us very simple questions, the answers to which sound quite amusing to them. They ask, ‘Where is your headquarters?’ We reply that we have none. This is not the best way to interact. They do not understand how to work with us, and perhaps think that we are too wily,” explained the Binance founder.

Over the past several months, financial regulators in several countries, including Великобританию, Нидерланды, Италия, Польшу, Японию, Таиланд, Гонконг, Сингапур, ЮАР и ряд других, выпустили предупреждения для инвесторов относительно деятельности биржи.

Zhao noted that much of the regulators’ concern is tied to the company’s business model.

“For a regulated exchange business, we need centralisation. We need a single legal entity with clear таблицами капитализации, прозрачными инвесторами, надлежащими советом директоров и управлением, ясными процедурами KYC/AML , а также системой контроля рисков”, — заявил основатель Binance.

Ранее на фоне серии предупреждений регуляторов Чжао опубликовал открытое письмо, в котором рассказал о планах биржи по обеспечению нормативно-правового соответствия и защиты клиентов.

Напомним, в августе Binance ввела обязательную верификацию пользователей.