Changpeng Zhao, founder and chief executive officer of Binance, the world’s largest cryptocurrency exchange, said that regulators need to come up with clear crypto regulations and should understand that the crypto industry is different from the traditional financial industry.

See related article: Binance rejects U.S. charges of violating trading rules, manipulating markets

Fast facts

  • “Having no regulatory clarity is the worst,” Zhao said on Wednesday at the Web3 Festival in Hong Kong. “Having bad restrictive regulations is better than that.”
  • “Having unclear ones and then chasing people by enforcement is really, really bad,” Zhao added.
  • Zhao also said that regulators need to understand the nuances of crypto. “There’s also a very natural tendency to borrow traditional financial [regulations] to just apply to crypto. Crypto is different from banks.”
  • His comments came after the Commodities Futures Trading Commission filed a lawsuit against Binance and Zhao, alleging the company violated derivatives rules by allowing U.S. residents to trade various financial instruments involving digital assets without licensing approval.
  • Just last week, the Australian Securities and Investments Commission canceled Binance Australia’s derivatives license, a day after receiving a cancelation request from the exchange.

See related article: ASIC cancels Binance Australia’s derivatives license