Binance on the way to legal recognition
It hasn’t been without its share of accusations of questionable business practices, however, which have earned the company a bad rap with regulators around the world. This starts to change in 2022, the year Binance seems to want to gain legal recognition.
Binance is the result of the singular vision and drive of Changpeng Zhao, also known as CZ, a Chinese-Canadian computer scientist who discovered Bitcoin in 2013 and became so addicted he sold his Shanghai apartment to get started thoroughly. He founded a centralized exchange called Binance in China in 2017, but had to move it soon after due to crypto-hostile regulations.
From the start, the company was a jack-of-all-trades. The exchange has continuously added more and more crypto-assets, as well as fiat gateways. It now supports over 61 fiat currencies and offers nearly 1,500 crypto trading pairs.
CZ did not stop at a centralized exchange, however. In just a few years, he launched a brand new blockchain called Binance Smart Chain (later – BNB Chain), which is a Proof-of-Stake fork of Ethereum. The blockchain, as well as its BNB cryptocurrency, have enabled Binance to nurture an entire ecosystem built on it: wallets, decentralized exchanges (DEX), DeFi protocols, crypto games…
The company also has its own DEX, as well as a derivatives trading platform, a Launchpad helping crypto projects raise funds, an educational outlet, an NFT market, a charity solution crypto, a wallet, a cloud… most things the crypto space has produced, Binance too.
Since leaving China, the company’s headquarters are officially in the Cayman Islands, but it’s actually run from numerous offices around the world, which makes Binance something of a headless company at home. legal provenance uncertain.
For a while in 2018 it was believed to be settling in Malta, but the Malta Financial Services Authority later refuted the rumour, saying the company had no license to operate in cryptocurrency. on the island.
Naturally, this situation did not please the regulators.
The first country to report Binance’s lack of compliance was the United States, officially banning it from serving its citizens in 2019. In response, Binance United States was launched in partnership with a rather obscure financial services company called BAM, whose main virtue was an active FinCEN registration.
Since then, several other countries like Japan, South Korea, Hong Kong, Australia, Singapore, Italy and the United Kingdom have issued warnings, urging the exchange to comply with their financial regulations, and the UK even went so far as to ban Binance in July 2021.
On the way to legitimacy
Crypto is increasingly becoming an integral part of the financial and regulatory landscapes, and for any crypto service provider with global ambitions, compliance is no longer an option, it’s a requirement.
This year marks a shift in Binance’s legal strategy, as CZ begins to unleash its legendary energy to woo financial authorities around the world. And it is already bearing fruit:
- In March, the company obtained a specialist license from the Virtual Asset Regulatory Authority in Dubai;
- in April – provisional green light from the Abu Dhabi Financial Services Regulatory Authority;
- in May – a digital asset service provider visa from the Autorité des marchés financiers of France, a “category 4” full crypto-asset service provider license from the Central Bank of Bahrainand more recently – a cryptocurrency service provider registration with the Organismo Agenti e Mediatori of Italy.
Binance is also currently in the process of authorization in Kazakhstan, a country with which it signed a memorandum of understanding last week, promising advisory assistance on crypto regulations and support for the blockchain hub of Astana.
Promising support (and putting his money where his mouth is) seems to be CZ’s winning strategy so far. Prior to official registration in France, Binance pledged to invest €100 million in the French crypto industry; prior to Dubai’s clearance, CZ personally bought an apartment there, publicly praising the local authorities for creating a “very good business environment”…
Crypto is always a topic that divides politicians, but the right economic incentives tend to change their minds. So far, Binance has been able to exploit this trend, legitimizing itself while driving the development of the crypto industry across the globe. CZ’s empire is about to grow even bigger.
Written by D. Center