Binance CEO Changpeng Zhao reportedly expects the crypto space to get hit with “heavy” regulations.
Speaking at the annual blockchain virtual summit REDeFiNE TOMORROW 2021, Changpeng Zhao (CZ) indicates that Binance, which operates the world’s largest cryptocurrency exchange as well as an ecosystem of blockchain-based platforms and initiatives, such as Binance Academy, Binance Labs, Trust Wallet, Binance Launchpad, and Binance Chain, is in the “mindset” of pivoting toward financial services.
CZ spoke with Tai Panich (TP), chief venture and investment officer of SCB 10X, the Thailand-based Siam Commercial Bank subsidiary that hosted the event. They discussed how Binance might transition amid incoming scrutiny of the crypto space.
“CZ: More regulatory scrutiny recently. It’s clear that heavy regulations should be expected. Binance is in the mindset of shifting from a tech startup to a financial service. We are increasing compliance efforts, including [hiring] ex-regulators.
So far, [communication] with regulators has not been our strong [suit]. Communication localization is also needed.”
According to an article published by Bloomberg in May, the U.S. Justice Department, the Internal Revenue Service, and the Commodity Futures Trading Commission are all reportedly probing Binance. The report noted that “the specifics of what the agencies are examining couldn’t be determined, and not all inquiries lead to allegations of wrongdoing.”
In 2019, officials banned Binance from operating in the US on regulatory grounds. Binance, along with other investors, subsequently launched Binance.US, an independent cryptocurrency exchange that registered with the United States Financial Crimes Enforcement Network to comply with US laws and regulations.
In conversation with TP, CZ reportedly discussed potential growth opportunities for Binance, including branching out into other continents and exploring various avenues in the cryptocurrency space, such as decentralized finance (DeFi) and non-fungible tokens (NFTs).
“CZ: [I] see huge potential for growth in Asia and [South East Asia]. Africa is also a blank-slate for development. Different strategies for different places.
TP: Exciting areas for Binance growth?
CZ: Active trading is not for everybody. Gaming, DeFi, NFTs. Lots of potential. I’m sure there are areas that we haven’t looked at that are on the verge of growing.”
When asked about the potential for an initial public offering (IPO), Zhao notes that while it’s on the agenda, it’s not the company’s primary focus right now.
“CZ: Binance US is looking at [the] IPO route. Most regulators are familiar with a certain pattern (having HQ, having corporate structure). But we are setting up those structures to make it easier for an IPO to happen.
No direct plan for IPO right now though. Currently [focused] on growing.”
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