Binance has been facing a lot of regulatory issues all over the world. The largest cryptocurrency exchange by volume of transactions has been under intense scrutiny from central banks and regulatory authorities in several countries.
All Facts News reported recently that the United Kingdom’s Financial Conduct Authority (FCA) banned the cryptocurrency exchange from operating in the country, stating that the exchange was not approved under the FCA’s cryptocurrency registration regime which is required for UK groups offering digital asset services.
Recently, news of a class-action lawsuit against the platform’s futures trading by investors who claim they lost “tens of millions” of dollars due to not being able to manage their positions and view their balances during peak trading hours, has taken headlines. This lawsuit comes from a group of Italian and international investors.
As a result of concerns from the users of the platform and the exchange’s stakeholders over Binance’s global regulatory issues, the company’s CEO and founder, Changpeng Zhao, popularly known as “CZ” has underscored the exchange’s commitment to cooperate with regulators.
In an open letter yesterday, Zhao emphasized that the cryptocurrency industry has massively evolved over the past four years since Binance’s launch and there is still a lot of regulatory uncertainty around cryptocurrencies.
He also said that the cryptocurrency industry lacks clear regulatory frameworks in several countries stating that “Compliance is a journey, especially in new sectors like crypto. The industry still has a lot of uncertainty. We also recognize that with growth comes more complexity and more responsibility. We are seeing wider adoption of cryptocurrencies globally and the need for clearer regulatory frameworks in different countries.”
Zhao mentioned that Binance has grown its international compliance team and advisory board by 500% since 2020, including appointments from major global regulators like the Financial Action Task Force. He also noted that Binance has been actively implementing Anti-Money Laundering policies on its platform, cooperating with crypto intelligence firm CipherTrace to ensure further protection. On this, he stated, “We are learning and improving every day. We firmly believe that our industry will benefit society through the creation of inclusive financial opportunities.”
Why this matters
Other countries like the Japan, United States, Canada, Thailand and the Cayman Islands have all taken steps against Binance in the form of an investigation, filing criminal complaints or banning the platform from operating within the country’s space.
A most recent move by the exchange to get its affairs in order was to hire two former members of the Financial Action Task Force to its advisory team in March.
Additionally, the company has hired Manuel Alvarez, who ran California’s Department of Financial Protection and Innovation to beef up its regulatory team.
With a lot of regulatory uncertainty surrounding the mega cryptocurrency exchange, Binance looks to be making significant efforts to settle its issues with regulators.