The CEO of Binance has responded to the regulation crackdown with a promise to double the size of the crypto exchange’s compliance team.
CZ also likened the maturing market to the introduction of the motorcar and welcomed the prospect of increased regulation as a “foundation for a broader population to feel safe to participate in crypto”, while admitting that Binance “hasn’t always got everything right”.
Watchdog the Financial Conduct Authority recently banned it from performing any regulated activities – such as futures, options, stock tokens, savings accounts and lending – in the UK. However, users of the popular platform can still buy and sell cryptocurrency, as this is not regulated for now.
The FCA also issued a consumer warning about Binance.com, specifically to be wary of adverts promising high returns on crypto investments. A similar warning about the platform was issued to US consumers by regulator the SEC in April while Japan’s Financial Services Agency has twice warned the company that it is operating there without permission.
Then this week UK bank Barclays stopped customers from transferring funds to Binance with the reasoning of “helping you keep your money safe”.
“We are seeing wider adoption of cryptocurrencies globally and the need for clearer regulatory frameworks in different countries,” wrote CZ in a blog post. “More regulations are, in fact, positive signs that an industry is maturing, because this sets the foundation for a broader population to feel safe to participate in crypto.
“I believe a well-developed legal and regulatory framework in the long term will be a solid foundation that truly makes crypto essential in everyone’s daily life.
“The adoption and development of crypto has many parallels with that of the car. When the car was first invented, there weren’t any traffic laws, traffic lights or even safety belts. Laws and guidelines were developed along the way as the cars were running on the road. These are frameworks and laws we take for granted today that allow this powerful technology to be used widely and safely.
“Crypto is similar in the sense that it can be accessible for everyone, but frameworks are required to prevent misuse and bad actors. Clarifying and building the first set of standards is critical for the industry’s continued growth.”
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He continued: “As a four-year-old startup, Binance still has a lot of room to grow. Binance has grown very quickly and we haven’t always got everything exactly right, but we are learning and improving every day.
“We hope to clarify and reiterate our commitment to partner with regulators, and that we are proactively hiring more talent, putting in place more systems and processes to protect our users.”
He claimed that Binance has grown its international compliance team and advisory board by 500% since last year, adding a pledge to double it again by the end of the year.
“Notable appointments include former FATF Executive Secretary Rick McDonell and former Head of the Canadian delegation to the FATF Josée Nadeau as compliance and regulatory advisors, as well as Max Baucus, the former US Senator for Montana and US Ambassador to China, to provide high-level guidance – these are the first of many high-profile additions to our team,” he wrote.
CZ said this year alone Binance has assisted 5,600 investigations into cybercrimes such as money laundering, terrorist financing and scams, recently supporting the takedown of a prolific cybercriminal ring responsible for laundering over $500 million worth of damages from dark web operations and high-profile cyberattacks.
“Our vision is to increase freedom and inclusion for a better human society. We firmly believe that our industry will benefit society through the creationing of inclusive financial opportunities,” he continued.
“In our first year as a company, we set up the industry’s first charity foundation Binance Charity, which has contributed $15m to over 20 projects for education, sustainability, and other causes.
“But this lofty vision won’t be possible without the support and guidance of regulators and policymakers who understand that innovation has the most long-term sustainable impact when tempered with frameworks to protect all participants.”