Changpeng Zhao criticises ‘mandatory’ cryptocurrency regulation

Binance CEO Changpeng Zhao (CZ) stated at the Web3 summit in Hong Kong that ‘mandatory crypto regulation is very bad’.

In his view, the only thing worse than a lack of regulatory clarity is the existence of onerous restrictions.

CZ noted that regulators have ‘a perfectly natural tendency’ to borrow recommendations from the traditional financial industry and apply them to cryptocurrency, but digital assets are a completely different sector.

“They are trying to control cryptocurrency by shutting banks, restricting access to fiat, and imposing more restrictions on traditional financial markets, which, in fact, only pushes people toward digital assets,” Zhao explained.

He also added that most agencies lack experience operating in the crypto market, which exacerbates the situation.

“Therefore it is crucial to actively engage with regulators. We can’t just say, ‘Hey, look, it’s decentralized. We’re nowhere’,” the head of Binance said.

According to Zhao, if authorities want to keep people on traditional markets, they should cut fees, simplify transactions, and improve user experience. The lack of progress in this area, he says, is driving crypto adoption.

In March, CFTC accused Binance’s US subsidiary of sham compliance with US derivatives trading rules.

CZ called the regulator’s claims ‘unexpected and disappointing’.

Chair Rostin Behnam said that the exchange’s actions were a clear case of evading the law, so authorities should have ‘intervened aggressively and as quickly as possible’.