Against a backdrop of regulatory problems facing the cryptocurrency exchange Binance, its chief Changpeng Zhao published an open letter outlining the company’s plans to ensure compliance and protect customers.
According to the CEO, Binance places protecting users’ interests at the forefront and, in this respect, shares regulators’ views around the world. Zhao called the exchange ‘the only trading platform with a responsible-trading program’.
“We added usage requirements for our platform and established industry standards: a strict insider trading policy, the SAFU fund to protect user assets, as well as strict listing standards and a firewall separating the listing team. We have invested in educational resources […] to help users of all levels make informed decisions about cryptocurrencies. For higher-risk products we have set limits,” Zhao explained.
The head of the company noted that Binance works closely with regulators, such as IRS, to curb illicit activity on its platform. In 2021 the organization responded to 5,600 requests from law enforcement — double the 2020 figure.
In June 2021, Binance helped Ukrainian law enforcement identify members of the FANCYCAT gang, which launders money for the ransomware operators Clop and Petya. The losses from the criminals’ actions were estimated at more than $500 million.
In Zhao’s view, in the long run a well-developed regulatory framework will be the “solid foundation” for the crypto industry, enabling more people to adopt digital assets.
He compared the crypto market to the automotive industry’s development, where rules and guidelines were developed on the fly as the number of road users increased.
“Today we take them [the rules] for granted, which allows widespread and safe use of this powerful technology. Cryptocurrencies are similar in that they can be accessible to everyone, but regulatory frameworks are necessary to prevent abuse and illicit actions,” the CEO explained.
Zhao emphasised that his company aims to make cryptocurrencies a safe and sustainable instrument for as wide an audience as possible. To this end, Binance “is taking and will continue to take” the following steps:
- Expanding the compliance staff. Compared with 2020, the international team of targeted consultants grew by 500%. By the end of 2021 the exchange plans to double their number;
- Expanding partnerships in compliance. Binance underwent several audits for AML compliance and launched the CipherTrace Traveler solution to meet the FATF’s travel rule. In 2021 the company collaborated with Interpol and the UN — it intends to continue maintaining relations with them;
- Localization of business to meet local regulatory standards. The exchange runs “partner brands” tailored to the laws of a region (for example, Binance US).
The head of Binance said that the cryptocurrency industry will bring benefits to society through inclusive financial opportunities. However, this is not possible without the support and governance from regulators.
“We welcome more constructive leadership that will help us grow. […] I and all Binance staff are ready and eagerly await the opportunity to be partners in developing and adhering to the principles that will allow the industry to grow sustainably,” he concluded.
At the end of June FCA forbade Binance Markets Limited from any regulated activity in the country without prior written approval. The exchange said the named entity did not provide services on the binance.com domain.
In the same month the Japanese financial regulator issued another warning to the company.
In July Thailand accused Binance of operating without a license, and Cayman Islands authorities initiated a probe into the activities of the bitcoin exchange.
In recall, on July 7 Binance suspended euro deposits via the SEPA system SEPA.
Read ForkLog’s bitcoin news in our Telegram — cryptocurrency news, prices and analytics.