Cryptocurrency exchange Binance wants to ‘be a financial institution’, seeks licences to undo regulatory red flags

Name: Is cryptocurrency too risky for China?
Uploaded: 2021-07-28T09:30:23.000Z
Duration: 6 min 54 s
Description: Is cryptocurrency too risky for China?

‘In the last four years, we were a start-up. Now, we want to be a financial institution,’ CEO says

Exchange subject to regulatory warnings, investigations and bans in jurisdictions ranging from the US and the UK to Hong Kong

Reading Time:3 minutes

Why you can trust SCMP

Zhao Changpeng, Binance’s CEO, has raised the prospect of being succeeded by a global executive with a strong regulatory background to help Binance pivot towards becoming a regulated financial institution. Photo: Reuters

Georgina Lee

Published: 5:30pm, 28 Jul 2021Updated: 9:52pm, 28 Jul 2021

Binance, the world’s largest cryptocurrency exchange, said it was seeking licences and multiple headquarters in response to a slew of warnings issued in several jurisdictions this year.

Zhao Changpeng, the exchange’s CEO, even raised the prospect of being succeeded by a global executive with a strong regulatory background to help Binance pivot towards becoming a regulated financial institution. The start-up was on the lookout for such a candidate but Zhao, who has been CEO for four years, did not say when he would step down.

“In the last four years, we were a start-up. Now, we want to be a financial institution,” he said during a media conference call late on Tuesday.

The pivot by Binance, which operates in more than 180 countries and claims it has an average daily trading volume of US$2 billion, follows a slew of regulatory warnings, investigations and bans in jurisdictions ranging from the United States, the United Kingdom, Germany, Japan, Italy and Lithuania to Hong Kong. Zhao said the move had become necessary after regulators’ positions on cryptocurrencies and virtual assets globally had become clearer in recent years.

In the US, Binance is being investigated by the justice department and the Internal Revenue Service over money laundering and tax issues, according to media reports. In the UK, Binance Markets, a unit, faces an outright ban by the Financial Conduct Authority after it found that it appeared “to be offering” products and services to UK customers through its website. The ban followed the withdrawal by Binance in May of an application related to a UK anti-money-laundering directive, according to media reports, which suggests it fell short of UK licensing requirements.

06:54

Is cryptocurrency too risky for China?

But the exchange claimed it has been making efforts to combat money laundering and suspicious fund flows. These include lowering its daily withdrawal limit to US$2,000, from two bitcoin a day, according to Samuel Lim, Binance’s chief compliance officer. Bitcoin was trading at US$39,807 on Wednesday.

Select Voice

Choose your listening speed

Get through articles 2x faster

1.25x

250 WPM

Slow

Average

Fast

00:0000:00

1.25x