Binance CEO CZ on How to Navigate Regulatory Minefields. Last week, Decrypt spoke to
Binance CEO Changpeng "CZ" Zhao about the exchanges approach to regulators. And then Forbes dropped its bombshell story. Nov 3, 2020 Feb 8, 2021. Create an account to save your
articles. In brief. Forbes has alleged that Binance concocted a scheme to evade US regulators. The crypto exchanges CEO Changpeng "CZ" Zhao has denied the claim. Speaking to Decrypt prior to the publication of Forbes' article, CZ described how Binance charts a path through a fluid regulatory landscape.
Last week, Decrypt interviewed Binances CEO Changpeng "CZ" Zhao. And then, just as we were about to publish the story, Forbes dropped a bombshell, alleging that the cryptocurrency exchange concocted an elaborate scheme to evade regulators . Viewed in that light, some of CZs comments, in which he spoke about Binances decentralized organizational structure, and its strategy for dealing with regulators, took on a whole new complexion.
Forbes report alleged that Binance created a US company dubbed the "Tai Chi entity" as part of an "elaborate corporate structure designed to intentionally deceive regulators and surreptitiously profit from crypto investors in the United States." According to leaked Binance documents quoted in the report, the exchange set up a US entity to "distract regulators with feigned interest in compliance," while customers were encouraged to evade geographic restrictions around the parent site.
CZ spoke to Decrypt before Forbes published its article, and, in the interim, he denied any knowledge of the document concerned. But what he had to tell us nevertheless sheds light on the operations of the rapidly expanding global crypto exchange, and its approach to dealing with regulators. A decentralized approach. During our conversation, CZ made his feelings on regulations plain, calling them "overly restrictive" in their current incarnation. "Two years ago, nobody knew what they were supposed to do, or not supposed to do.
There was just no regulatory clarity," he said. "Today I think we are in a situation where most of the first iteration regulations are likely going to be overly restrictive because the most natural thing for
30 sec binary options regulators to do is to borrow the traditional banking regulations and apply them to crypto." CZ said he doesnt look at things on a country-wide basis. Instead, he examines markets regionally. Image: Decrypt. But over time, said CZ, regulators will better understand that restricting cryptocurrencies and crypto exchanges is counterproductive because people can now use a P2P platform, or a decentralized exchange (DEX), without a central party being involved.
Binance P2P is reporting double-digit growth , but trading volumes are a drop in the ocean compared with spot trading on the main exchange, so theres a long way to go.
