Binance Fights Increasing Regulation

Zhao Changpeng, founder of Binance, was able to grow his company into the world’s largest digital-asset exchange by traded value in less than eight months. The exchange, however, may face challenging times as regulators worldwide start clamping down on the cryptocurrency market. Zhao has described regulation as a risk for Binance.

Binance Under Pressure as Regulators Clamp Down on The Market

Financial watchdogs and governments worldwide have been studying the cryptocurrency market and passing legislation in order to regulate the activity in a way that suits them. Binance, who has some of the least rigorous know-your-customer (KYC) policies within the industry and supports initial coin offerings (ICOs), has reasons to be concerned.

South Korea’s Financial Services Commission has tightened KYC rules for cryptocurrencies in the past months, which should limit the level of anonymity that benefits criminal activities such as money laundering and market manipulation. The Securities and Exchange Commission, the U.S. financial watchdog, is actively scrutinizing ICOs, cryptocurrency hedge funds, and exchanges.
The increased regulatory pressure builds on Binance as the company aims to expand its operations. Following inquiries from Japan’s FSA and an official notice to stop operating in the country without a license, Zhao Changpeng has reportedly canceled its plan to open an office in Japan last month. His response on Twitter: “New (often better) opportunities always emerge during times of change.
The exchange, which reported a $200 million profit in its second quarter of existence, has faced several warnings in recent months including from Hong Kong’s Securities and Futures Commission. The regulator does not allow trading cryptocurrencies that qualify as securities.
Thomas Glucksmann, head of Asia-Pacific business development at Gatecoin exchange, said: “It’s a regulatory minefield out there right now. Less than a handful of jurisdictions are welcoming crypto businesses and even fewer have very clear rules and guidelines for crypto exchanges.”

David Shin, president of the Singapore-based Asia Fintech Society, told Bloomberg: “Binance lacks regulation and transparency. It’s like a van stopped in front of an office building selling coffee while the legit coffee shops on the street suffer.’’

Many Binance customers support its policies. “The less regulation, the better. I’m confident in Binance’s ability to secure its own platform”, Zachary Ising, a U.S. cryptocurrency trader, told Bloomberg.

Even the locations of Binance’s offices and servers are a secret in order to make it harder to determine which country has jurisdiction over the company. “We’re OK to do things very creatively to avoid unnecessary regulation,’’ Zhao said in a recent interview.

Binance has close to $1.8 billion in daily trading volumes, according to Coinmarketcap.com, but there is no regulator to audit its volume statistics.

Source: www.newsbtc.com