Binance battles regulatory headwinds as world’s largest cryptocurrency exchange seeks financial legitimacy
- ‘We have come to realise that we need a centralised entity to work well with regulators,’ CEO Zhao Changpeng says
- Binance is rebuilding the exchange into a licensed financial institution with centralised headquarters as it attempts to improve ties with regulators
Binance, the world’s largest cryptocurrency exchange, is making a pivot to a licensed financial institution by rebuilding itself into a centralised business, as it navigates through a myriad of regulatory red flags that threatens to set back its past four years’ of growth.
In building a centralised firm with headquarters, the sprawling exchange – with entities incorporated in the Cayman Islands but not for the purpose of running cryptocurrency business – would be disavowing the core ethos of blockchain, the backbone technology of virtual assets which seeks to disintermediate centralised authorities.
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Binance CEO explains how the crypto-exchange is charting a path to become a financial institution
But as cryptocurrencies’ market cap has grown to US$2 trillion, too big for regulators to ignore, players that have profited from the cryptocurrency “wild west” in the past can no longer operate by simply hosting their matching engines on the cloud or by operating without a registered office.