Changpeng “CZ” Zhao, CEO of Binance — the world’s largest cryptocurrency exchange by trading volume — posted an open letter today outlining Binance’s plans for navigating the current crypto regulatory landscape.
Zhao’s letter comes as pressure mounts on Binance with regulators across the world — including the Cayman Islands, Japan, Thailand, United Kingdom and the United States — issuing warnings or launching investigations into Binance’s operations.
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“More regulations are, in fact, positive signs that an industry is maturing, because this sets the foundation for a broader population to feel safe to participate in crypto,” Zhao wrote. “I believe a well-developed legal and regulatory framework in the long term will be a solid foundation that truly makes crypto essential in everyone’s daily life.”
“Compliance is a journey — especially in new sectors like crypto. The industry still has a lot of uncertainty,” Zhao added. “We also recognize that with the growth comes more complexity and more responsibility.”
Binance expands international compliance team
Binance has grown its international compliance team and advisory board by 500% since last year, Zhao wrote, with key appointments including former FATF Executive Secretary Rick McDonell, former Head of the Canadian delegation to the FATF Josée Nadeau, and Max Baucus, the former U.S. senator for Montana and a former U.S. ambassador to China, to provide guidance on the company’s global compliance and regulatory strategies. Binance is also expanding its compliance partnerships, for example with CipherTrace, and localizing its operations to comply with local regulations such as in the United States, Zhao added.
Binance today also announced the hire of Jonathan Farnell, the former eToro Money U.K. director of compliance, as director of compliance for Binance to oversee regulatory compliance in Europe and the development of regulated products, including regulated e-money and crypto asset services.
“Jonathan is a very accomplished compliance professional who brings vital expertise in the development of regulated products that will be an enormous asset to Binance,” said Samuel Lim, chief compliance officer at Binance, said in a statement. “We are committed to meeting our compliance obligations everywhere we operate and bringing Jonathan on board is a significant step forwards in developing our team.”
Farnell’s appointment comes as Binance faces an onslaught of bad news around the world — especially in Europe.
Binance suspends SEPA deposits
Binance today, from 7 a.m. UTC, suspended Euro deposits via the E.U.’s Single Euro Payments Area (SEPA) bank transfers — a way for customers to purchase crypto using fiat. But Binance customers can still buy cryptocurrencies via credit or debit cards on Binance.
“We are working hard to find a solution with our partners,” according to the notice Binance shared with Forkast.News. “Any deposits attempted via SEPA in the meantime will be returned within 7 working days. SEPA withdrawals are unaffected by this suspension.”
The suspension of euro SEPA transfers follows Barclay’s decision earlier this week to block customers from sending funds to Binance.
“We are disappointed that Barclays appears to have taken unilateral action based on what appears to be an inaccurate understanding of events. They refer their users to an FCA notice that was issued recently addressed to Binance Markets Limited (BML) and stated that they were taking this action to keep people’s money ‘safe,’ a Binance spokesperson told Forkast.News in an email. “In fact, the FCA notice was not about user deposits on Binance.com at all. We have always taken the security of our users’ money very seriously.”
“The FCA notice relates to BML, which is a company incorporated in the U.K. and regulated by the FCA. BML is a separate legal entity and does not offer any products or services via www.binance.com. The FCA notice applies only to BML, as the entity is regulated by the FCA. The FCA notice does not apply to the products and services provided through www.binance.com, nor does it change any arrangement with our users,” the Binance spokesperson added.
“We take our compliance obligations very seriously, and we are committed to working collaboratively with regulators to shape policies that protect consumers, encourage innovation, and move our industry forward,” the Binance spokesperson said.
Last month, the U.K.’s Financial Conduct Authority announced that Binance Markets Ltd. — part of the Binance Group — “is not permitted to undertake any regulated activity in the UK.”
But despite the recent regulatory backlash, Binance is still a giant in the crypto space — as of publishing time, the cryptocurrency exchange processed US$16.3 billion in 24-hour trading volume, compared to US$1.9 billion for Coinbase, the largest cryptocurrency exchange in the United States, according to CoinGecko data.