Binance aims to move from its start-up origins to become a financial institution, but CZ isn’t leaving, rather is putting “commitment to compliance” as their top priority. The exchange has also launched the Tax Reporting Tool to help its users fulfill their tax reporting requirements.
Leading cryptocurrency exchange, Binance now wants to set up regional headquarters and be recognized by local regulators, said chief executive officer, Changpeng Zhao.
“We want to be licensed everywhere,” Changpeng Zhao told journalists, saying he wanted to “work with regulators everywhere.”
“From now on, we’re going to be a financial institution,” he said, adding that this would be breaking from its earlier decentralized model and maturing from its start-up origins.
As a first step towards getting a regulated move, Binance is becoming KYC (know your customer) compliant in order to “support” the security of its users, it said.
The exchange announced a reduction in its daily withdrawal limit to 0.06 BTC for those who are not completely verified but only have Basic Account Verification. This adjustment will be effective in phases starting from August 4 and will be completed by August 23.
The same restriction applies to new account registrations but is effective immediately.
“We continually review our policies to ensure that we surpass industry standards. This adjustment better accounts for current BTC prices. You can increase your withdrawal limit by completing identity verification.”
The same day, Binance launched the Tax Reporting Tool to help its users keep track of their crypto activities so that they are fulfilling the reporting requirements laid out by their regulatory bodies.
CZ has fully caved to regulatory pressure
— Alex Krüger (@krugermacro) July 27, 2021
‘What if the less reg friendly things move to BSC/ some other chain. I’m thinking things like derivatives and lending markets. Binance has been writing a shit ton of checks in that space,” noted market maker IamNomad in response to Binance’s latest move.
Binance Smart Chain (BSC) is actually seeing a renewed interest lately, with the daily transactions on the blockchain hitting a new peak above 11.9 million on July 27 after bottoming around 3.14 million earlier this month, as per BSC Scan.
Unlike the last peak, this time, DEX PancakeSwap is not behind this success but CryptoBlades, a play-to-earn NFT game. This makes sense, given that Axie Infinity has been leading the market during the downturn of the last three months.
— CZ 🔶 Binance (@cz_binance) July 27, 2021
Amidst all this came reports of CZ looking to hire his replacement as the next CEO.
During a conversation with Mukaya Panich, CIO at Thailand’s Siam Commercial Bank’s venture arm SCB 10X, CZ said he is looking for a senior person with strong compliance and regulatory background.
“I don’t think I’m the best person to lead that effort. I think having somebody with a very strong regulatory background is actually better.”
CZ, however, took to Twitter to explain that “there are no immediate plans to replace me as CEO,” though he would like to hire someone with a special regulatory background to show their “commitment to compliance,” which he said is their top priority.
“I feel CEOs should not stay for more than 10 years, ideally around 5 years… We are always hiring for CEOs. I don’t need to be CEO, and I am not leaving.”
Can you feel the momentum shift from Binance to FTX?
mainstream brand and sponsorships
Low liqs and leverage
The other one
Fiat ramp and regulatory struggles
No mainstream brand
High liqs & leverage
— Goomba (@im_goomba) July 27, 2021
Much like in 2018, Binance became the leader in the crypto space; market participants believe the momentum is shifting yet again, with FTX coming on fast behind Binance to take up the first spot.
While Coinbase already had its initial public offering to mark Bitcoin top so far this year and Kraken is also planning sometime next year with FTX considering but not really needing it, CZ is now mulling a future IPO in the US but said the plan “is not 100% fixed yet.” Such plans would require Binance to have a legal entity and headquarters.
“We are setting up those structures.”
“Once those structures are in place, you may make it easier for an IPO to happen. So that’s not out of the question. But right now, we are still in the early stages.”
Binance has been facing a lot of regulatory scrutiny from all over the world especially due to not having an HQ, something regulators aren’t comfortable with, especially UK watchdog FCA which called the lack of a headquarters a “huge issue.”
Up until now, CZ has maintained that his definition of a headquarters is different from others, which is finally changing as the exchange faces the pressure of regulators and, given the latest changes made by the exchange, is also caving to them.