Binance News

Binance needs centralized entity to work with regulators, says CZ

TL;DR Breakdown:

  • Binance is pivoting to launching a centralized entity as it continues to seek to become compliant with regulators.
  • Regulators see its operations to be dodgy based on the narrative that the exchange doesn’t have physical headquarters.

Leading cryptocurrency exchange, Binance is finally considering abandoning the idea of running “decentralized headquarters” as part of the effort to collaborate with regulators, according to the CEO, Changpeng Zhao. Although the exchange is centralized, it has since claimed that it doesn’t have any physical headquarters. This narrative isn’t going well with regulators. 

The exchange has been under regulatory turbulence for quite some months, and regulators find its operation to be “dodgy,” based on the claims that Binance doesn’t have centralized entities anywhere around the world.

Binance is pivoting to centralized headquarters

While speaking with the South China Morning Post on Thursday, CZ emphasized why a centralized entity would be necessary at this point, as the exchange seeks to comply with regulators. 

“There are very simple questions regulators usually ask us, which our response is kinda funny. The regulators ask us where’s your headquarters, and our responses is, well, we don’t have headquarters. That doesn’t go well with regulators. They don’t know how to work with us. Sometimes they even think we are dodgy obviously,” Zhao said.

As a centralized exchange, Binance needs to establish a centralized entity while also maintaining clear records of stakeholders’ ownership, risk controls, and transparency for them to work well with regulators. 

Regulators are tensed regarding Binance

Over the past few months, Binance faced regulatory headwinds from countries in the European Union, including the United Kingdom. Recently, the Monetary Authority of Singapore (MAS) added the exchange to its Investor Alert List, which comprises unregulated entities that may have been wrongly perceived as being licensed or regulated.

Early this month, the South African authorities had warned citizens against using or accessing Binance services, given they are not regulated in the country. 

This post was last modified on September 16, 2021 12:21 pm

Ibiam Wayas

Ibiam is an optimistic crypto journalist. Five years from now, he sees himself establishing a unique crypto media outlet that will breach the gap between the crypto world and the general public. He loves to associate with like-minded individuals and collaborate with them on similar projects. He spends much of his time honing his writing and critical thinking skills.

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