Binance vows to work with regulators, protect users

CEO acknowledges need for guidelines to prevent global misuse of cryptocurrencies

Above: The Binance cryptocurrency exchange trading app. Right: Binance has faced heavy scrutiny from global regulators in recent months. Notably, Britain's financial watchdog has barred the company from carrying out regulated activities.
Above: The Binance cryptocurrency exchange trading app. Right: Binance has faced heavy scrutiny from global regulators in recent months. Notably, Britain's financial watchdog has barred the company from carrying out regulated activities.PHOTOS: BLOOMBERG, ST FILE
Above: The Binance cryptocurrency exchange trading app. Right: Binance has faced heavy scrutiny from global regulators in recent months. Notably, Britain's financial watchdog has barred the company from carrying out regulated activities.
Above: The Binance cryptocurrency exchange trading app. Right: Binance has faced heavy scrutiny from global regulators in recent months. Notably, Britain's financial watchdog has barred the company from carrying out regulated activities.PHOTOS: BLOOMBERG, ST FILE

Cryptocurrency exchange Binance is committed to working with regulators and putting in place systems to protect its users' interests, its chief executive and founder Zhao Changpeng said yesterday.

In a letter published on the firm's website, he acknowledged the need for the development of formal guidelines to prevent misuse of cryptocurrencies globally.

"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," Mr 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," he said, adding that clarifying and building the first set of standards are critical to the industry's continued growth.

The Cayman Islands-incorporated firm is growing its international compliance team to provide "high-level guidance" and has plans to double the team size by the year end, Mr Zhao noted.

His statement came a day after Binance told users that it would temporarily suspend euro bank deposits from one of Europe's key payment networks.

Customers were no longer able to deposit funds through the Single Euro Payments Area scheme from yesterday because of "events beyond our control", Binance said in an e-mail to them.

The world's largest cryptocurrency exchange has faced heavy scrutiny from global regulators in recent months.

Notably, Britain's financial watchdog has barred the company from carrying out regulated activities.

Thailand's Securities and Exchange Commission has filed a criminal complaint against Binance for operating a digital asset business without a licence. It had issued a warning to Binance about its activities in April.

The company has also been probed by various regulators and government agencies in Germany, Japan and the United States.

In his letter, Mr Zhao said the firm aims to continue its efforts in working with regulators to address their concerns as the industry grows, noting that there is "still much to do to harmonise the treatment of cryptocurrency around the world".

The firm has assisted in some 5,600 investigation requests this year from law enforcement agencies around the world to crack down on cybercrimes such as money laundering, scams and terrorist financing, he noted.

The Monetary Authority of Singapore told The Straits Times earlier this month that it was aware of the actions other regulatory authorities have taken against Binance, and that it would follow up as appropriate.

Binance's Singapore arm, Binance Asia Services, is exempted from holding a licence under the Payment Services Act for the provision of digital payment token services while its licence application is being processed.

It launched in Singapore in 2019, and has not disclosed its number of active users or the estimated funds handled on its platform here.

Total trading volumes across Binance's platforms reached US$662 billion (S$892 billion) last month, according to data provider CryptoCompare.

Binance's own cryptocurrency, Binance Coin, is among the biggest in the world.

A version of this article appeared in the print edition of The Straits Times on July 08, 2021, with the headline 'Binance vows to work with regulators, protect users'. Subscribe