Binance ’s Road To Compliance Continues With A List Of Rights For Crypto Users
After a few scares, Binance ’s offensive moves start. Regulators around the world surrounded the biggest cryptocurrency exchange by market capitalization. Their lawyers were working overtime. There were pitfalls all around. A few months later, Binance is the one setting the rules. They’re the ones inviting the regulators to the castle. They’re trying to set the tone and define what a fully compliant cryptocurrency exchange is.
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The campaign started with Binance’s first traditional media ad in the company’s history. A full-page in the Financial Times and a website to complement it. “Crypto belongs to all of us. But there’s still work to be done if we want this breakthrough innovation to become part of our daily lives. Like seat belts in a car, a more regulated crypto market provides greater protections for everyday users,” says the ad’s copy. Exactly what the regulators want to hear.
How #Binance plans to welcome the next billion crypto users. pic.twitter.com/0oigvdgQCj
— CZ Binance (@cz_binance) November 16, 2021
What Did Binance Say To The Press?
The company’s CEO, Changpeng Zhao AKA CZ, spoke to Bloomberg to spread the news. About the aim of their campaign, he told them:
“We have been communicating with many regulators around the world. As a new industry, we like to share what we think is important for users.
We want to put this out there so everybody understands from our position what’s important. We already shared this — not in this format — with different regulators, and we want the users to know as well. We have a much more detailed framework that we share with regulators directly.”
He also tells them that the regulators were skeptical of Binance at first, but that in-person meetings have helped win them over. “When people see me in person, they say, “look, CZ is very reasonable, very calm, not a crazy guy.” In a related topic, when they ask him if the users leave as they tighten compliance, CZ answered “There is a small group of people who do not like to do know-your-customer rules, get verified etc. It’s a free market. There are other platforms they could use.” And then claims, “We only lose 3% of the users.”
BNB price chart on FTX | Source: BNB/USD on TradingView.com
Highlights From The “10 Fundamental Rights For Crypto Users”
Since the focus of this article is regulation and compliance, let’s focus on the three rights that touch the subject. For those interested in the rest of the text, here’s the website. Binance basically promises financial services, security, and privacy for everyone.
“II. Industry participants have a responsibility to work with regulators and policymakers to shape new standards for crypto assets. Smart regulation encourages innovation and helps keep users safe.”
Binance pledges to work with regulators and invites them to the castle. Does the part about “smart regulation” contain a light threat? If it does, it leaves space for plausible deniability.
“III. Responsible crypto platforms have an obligation to protect users from bad actors and implement Know Your Customer (KYC) processes to prevent financial crimes.”
Once again, Binance promises to implement KYC to all its users. The platform used to let unverified accounts transact small amounts. As soon as the regulators started knocking at their door, Binance announced KYC for everyone. And here, they double down on the policy.
“VII. Regulation and innovation are not mutually exclusive. Crypto users deserve safe access to emerging technologies and practices, including NFTs, stablecoins, staking, yield-farming, and more.”
Binance is willing to work with regulators, but they also have to play ball and let them work. The company’s tactic so far is to aggressively pursue every and all innovations in the cryptocurrency ecosystem. And they want to keep doing it. Or else.
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The last two “fundamental rights” also deal with regulations, but in a less direct way. They are also pretty obvious. Number nine says “Marketplaces that offer derivative instruments should be subject to the appropriate regulations.” Number ten, that “Crypto regulation is inevitable,” and users have the right to voice their concerns.
All in all, it’s a pretty empty text that doesn’t say much. Perfect for regulators. CZ is a genius and Binance’s future looks bright.
Featured Image: Binance’s first ever ad from this tweet | Charts by TradingView