Changpeng Zhao outlines fruits of Binance’s cooperation with regulators

Against a backdrop of tightening KYC requirements, the cryptocurrency exchange Binance has shed only 3% of its users, and cooperation with regulators is already bearing fruit. This was disclosed by chief executive Changpeng Zhao in an interview with Bloomberg.

Bloomberg interview. https://t.co/aAT8SrsCgy

— CZ 🔶 Binance (@cz_binance) November 17, 2021

This week Binance acquired advertising space in the Financial Times. The exchange published a digest ’10 Fundamental Rights of Crypto Users’ (information also доступна on a separate landing page).

How #Binance plans to welcome the next billion crypto users. pic.twitter.com/0oigvdgQCj

— CZ 🔶 Binance (@cz_binance) November 16, 2021

According to Zhao, the company decided to publish this list following dialogues with various regulatory authorities. He noted that the digest reflects Binance’s stance on the matter. The exchange shared the same considerations, presented in a more extensive form, with the relevant government agencies.

Previously, financial regulators in several countries, including the Netherlands, Italy, Poland, Japan, Thailand, Hong Kong, Singapore, South Africa and a number of others, issued warnings to investors about the company’s activities.

Against this backdrop, Binance CEO published an open letter, in which he outlined the exchange’s plans for ensuring regulatory compliance and client protection.

In August the company introduced mandatory user verification. According to Zhao, there is ‘a small group of people’ for whom this decision was unwelcome, but 97% of users pass KYC procedures.

“This is a free market. There are other platforms they could use. At Binance we decided to pursue full legal compliance and mandatory KYC for global users for every function. … Most people indeed feel more comfortable using a licensed exchange,” he noted.

Zhao stressed that face-to-face meetings are important in dialogues with regulators. He said that as COVID restrictions ease in different countries, he tries to undertake more business trips.

“There have been many instances where regulators initially treated us with skepticism, and then, as we engaged more with them, that attitude changed. … When people meet me in person, they say: ‘Look, CZ is quite reasonable, very calm, not at all a crazy guy.’ So these face-to-face meetings help build trust,” he explained.

In Zhao’s view, China will remain closed to Bitcoin exchanges for a long time. He described the blocking methods used by the Chinese authorities as “very comprehensive and effective”.

“Therefore I do not see any way for Chinese users to interact with cryptocurrency platforms like ours in any reasonable way. I also do not foresee any change in government policy in the near term,” he added.

Zhao said that investors have shown interest in Binance—some companies even held talks, but those discussions did not proceed further. Consequently, the CEO regards various assessments that appear in the media as ‘highly subjective.’

The head of the company noted the popularity of projects built on the play-to-earn concept. He stressed that there are other models such as study-to-learn, and in the future the community will see even more ‘innovative uses in which you can do everything to earn.’

Binance is also placing a heavy emphasis on fan tokens, considering them interesting. Zhao stressed that he tries to devote part of his time to studying these projects.

In conclusion, the chief executive touched on the topic of Binance’s departure from a decentralized model of doing business. Zhao said Binance has created several holding companies around the world. Details of the restructuring will be disclosed ‘in the near future’ — before making a public announcement the CEO intends to convey these details to regulators.

In November, Zhao said the company planned to open a headquarters in France.