After years of ignoring and even openly flouting global financial regulations, 2021 has been the year of reckoning for the Binance exchange. Regulators in over a dozen jurisdictions have booted it out or issued warnings against it. These include the Financial Conduct Authority (FCA), which warned that Binance was operating illegally in the U.K. earlier this year. However, in a recent interview, founder and CEO Changpeng Zhao says that the exchange is re-engaged with the watchdog and plans to become registered in the country.
Zhao, popularly known as CZ, stated that the exchange was making structural changes to adhere to U.K. regulations.
“We’re fully re-engaged there. We’re making a number of very substantial changes in organisational structures, product offerings, our internal processes, and the way we work with regulators,” he told the Telegraph. “We want to continue to establish a presence in the U.K. and serve U.K. users in a fully licensed and fully compliant manner.”
Binance is the world’s largest digital currency exchange. While its size could have allowed it to become a force for good and offer transformative financial services to millions, CZ’s heavy hand has seen him use it to play favorites and punish opponents. Bitcoin SV has been one of the casualties, with CZ deciding arbitrarily to delist it because he disagreed with Dr. Craig Wright.
CZ’s dictatorial tendency has been well documented elsewhere, not just with Bitcoin SV. This was one of the reasons Brian Brooks resigned as the head of Binance.US, and some leading VC firms withdrew from a funding round, according to an exposé by the New York Times.
One of the ways that CZ plans to make Binance compliant in the U.K. is by creating a local entity, just as it has done in the U.S. or in Singapore (yet another country where it was forced to halt services).
It also hopes that creating a global base (since it currently has no physical headquarters) will win back the trust of regulators. As CoinGeek reported, the exchange has been exploring countries where it could base its global headquarters. The CEO says he has already decided on the location and that Binance will be making the announcement soon.
“We understand that now [how lacking physical HQs affects them]. So now we’re in the process of setting up real offices, legal entities, a proper board, proper governance structures in most places, including the U.K.,” said CZ.
Hoping to win back the FCA, Binance has also been hiring a number of former staff members at the watchdog and a “couple of hundred compliance people,” CZ told Telegraph.
He added, “Our team has definitely had very positive interactions with the FCA since then, we requested in person meetings as soon as we saw that notice. So that communication is definitely happening.”
CZ has accumulated quite a big fortune as the largest shareholder of an exchange that processes about $100 billion in trading volume daily. However, he insisted that he doesn’t care much about personal wealth and doesn’t even know how much he’s worth.
He further revealed that he intends to step away in the next 5-10 years as the Binance CEO. He would like for the person who takes over to have a strong compliance background. And who knows, maybe the next CEO will not let personal differences deter millions from accessing the true Bitcoin (BSV) and will relist it.
As CZ ponders on when might be the best time to step away from his position as CEO, another industry titan was forced to resign after his exchange was found guilty of breaking financial laws. Arthur Hayes, the former CEO of BitMEX, which for some time was even bigger than Binance, resigned a year ago and surrendered to U.S. authorities in April this year to face his charges. Worryingly for CZ, the charges against BitMEX and those against Binance are eerily similar.
Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—a from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple, Ethereum,
FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.
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