Binance
- Binance drops its insistence on decentralization and vows to establish HQs globally
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Shift towards greater regulatory compliance and hiring of ex-regulators may help Binance in its push to convert its existing user base into a platform that combines the best of its liquidity within a regulatorily compliant structure
“I fought the law, but the law won.”
– I Fought the Law (1959), The Crickets, off the album “In Style with the Crickets”
Despite having no headquarters but operating everywhere, regulated nowhere, but serving everyone, the Hard Rock-esque “love all, serve all” ethos of Binance is now swapping a hoodie for a suit, as the embattled cryptocurrency exchange is seeking more compliance staff.
For years, Binance has been “hiding” in plain sight, operating the world’s largest cryptocurrency exchange by trading volume, while dancing around regulators and regulations.
Registered in the Cayman Islands, Binance has deftly dodged regulators at every juncture, preferring instead to establish local entities in some of its key markets, serving as entities that regulators in those jurisdictions could target, while leaving the main exchange unscathed, providing the ability to be everywhere and nowhere all at once.
Like the fabled hydra, that multi-headed snake that couldn’t be vanquished, Binance embodied the theme of decentralization of the blockchain, despite having over a thousand employees, the company has no formal headquarters.
Despite handling billions of dollars in transactions daily, Binance has somehow managed to avoid regulation and yet managed to also attract millions in investment.
Hedge funds use Binance as do institutional investors in the know because for liquidity, the cryptocurrency exchange can’t be beat,
Binance’s convivial CEO, Changpeng Zhao, or CZ as he is better known, is a regular feature on CNBC and Bloomberg, and hounded like a celebrity at major cryptocurrency events where he deigns to make an appearance.
But increasing regulatory scrutiny of the cryptosphere has seen the cryptocurrency exchange come under pressure and according to a report from Bloomberg, Binance is in talks with a former senior Singapore Exchange executive to take up the top job at the local business unit of Binance in Singapore, a key cryptocurrency hub.
Binance’s steadfast growth trajectory could be coined (pun intended) similar to Facebook’s (-2.21%) philosophy of “move fast and break things” gaining market share by being more aggressive and following far fewer regulations than rivals such as the regulated Coinbase Global (-2.35%).
But that growth mindset has also caused Binance to rub regulators the wrong way, and attracted regulatory scrutiny from countries including the U.S., U.K., Thailand and Japan.
CZ is willing to play ball however, and announced at a recent press conference that Binance will establish multiple headquarters globally and CZ is said to be looking for regional CEOs as well as a potential successor for himself, with a focus on compliance experience weighing heavily on the selection process.
While there’s no doubt that Binance’s recent moves are intended to placate regulators, it will take far more than a battalion of compliance staff to placate authorities in financial centers where issues such as anti-money laundering, tax evasion and know-your-customer have gained emphasis.
