Binance CEO Advocates for Fundamental Crypto Rights
Binance CEO Advocates for Fundamental Crypto Rights
(Bloomberg) -- Crypto exchange Binance has published a list of “fundamental rights” amid increasing regulatory pressure, arguing everyone should have access to financial tools like crypto.
Chief Executive Officer Changpeng “CZ” Zhao told Bloomberg News the list is a reflection of what Binance considers to be most important when it comes to regulating crypto, providing the latest example of an exchange trying to shape the rules of the road.
Few companies loom as large in the world of digital assets as Binance, which grew quickly along with crypto in an environment with few rules. Now that it’s a big fish and regulators are looking to impose order, it’s been the subject of warnings or actions from numerous countries.
Below is a wide-ranging Q&A with Zhao about the list of rights, his thoughts about regulation, as well what’s happening with the investigation into the Squid Game token.
Answers have been edited for length and clarity.
Why did you decide to release this ‘Fundamental Rights’ list?
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.
Have users left as you tighten compliance?
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.
But for Binance, we have chosen to go with full compliance, full mandatory KYC for global users, for every feature. We feel that being compliant will allow more users to use us. Most people do feel more comfortable using a licensed exchange.
Most people -- 96%, 97% of users -- go through KYC. We only lose 3% of the users.
Have you had success at winning over regulators?
We have had many interactions where the regulators are skeptical with us at first, and then as we communicate more and more with them, the attitudes do change.
In-person meetings are important. Just having that first interaction in person is important. For me personally, unfortunately over the last two years we weren’t able to travel. But over the last couple of months with travel restrictions being lifted in different places, I have been traveling.
When people see me in person, they say, “look, CZ is very reasonable, very calm, not a crazy guy.” So that helps establish their trust much faster.
Any thoughts on China?
I don’t think there’s anything to be done in China right now from a blockchain industry perspective. The actual restrictions, the actual block is much stronger this time than in 2017.
In 2017, Binance.com the website was blocked by the Chinese firewall. This time around, in the last couple years or so, even SMS messages to Chinese mobile numbers, like the two-factor verification codes, do not get through. Email verification to any of the Chinese email software providers gets blocked.
There’s really not an easy way, the blocks are very complete, very effective. So I don’t see any way that China users can continue to use crypto platforms like us in any reasonable fashion. I also don’t see the policies changing in the short term.
What about valuation and fundraising?
There are always investors that approach us, and we always try to find out how they value us, as valuations can be very subjective.
For Binance.com, there have been discussions with some investors but nothing too serious yet. I know there are different valuations being floated around. But we haven’t had a meaningful transaction yet, so those valuations are all very subjective.
Any comment on the Squid Game token investigation?
If the project teams hide their tracks very efficiently, it may take a long time to discover who they are. That’s one of the downsides of decentralized. And they may be anywhere in the world. It may take a very concerted effort to actually find them.
Education is the best preventive measure for this type of situation. It’s very important for users to understand that everything they do, everything in this world has risks. You’ve just got to understand what those risks are and deal with it accordingly.
Don’t invest in projects that you don’t know well and don’t trust. If you do, be prepared, know that if you have limited information, these rug pulls could be possible.
What innovations look particularly interesting to you?
We’re seeing these new types of finance tools which are much more inclusive. In addition to play-to-earn, there’s study-to-earn -- which was brought to me by a project. While students are studying they can earn different coins, and they can actually pay because the coins do have value. Now moving forward, you’re probably going to see many innovative use cases where you can do anything-to-earn.
We’re also making a big push for fan tokens. We’re helping sports teams all around the world to access this new way of fan engagement, and have a new way of monetizing activities they weren’t able to monetize before. They have fans vote for different jersey colors, music anthems for entering the stadium -- all of these things are now being associated with fan tokens. Those new areas are very interesting. I always try to spend a portion of my time understanding them.
What do you think about Singapore as a crypto hub?
Singapore is quite a good place. I’m not sure I’d classify Singapore as a crypto hub, or not, yet. I think we’re still very early in the industry.
Given Singapore’s success, other regions are actually wanting to attract crypto businesses as well. We see many other regions coming up with very favorable regulations toward crypto. France, Dubai or the UAE, they’re all coming out with very friendly crypto regulations.
They all understand the importance of attracting crypto businesses and encouraging innovations in the space. So there are multiple centers and hubs around the world now, which is very good for the industry.
How is progress on the global headquarters coming?
We have established global holding entities etc. So we’ve set up a much more centralized structure. The details of that will probably come out soon. We want to communicate this with regulators around the world before we make any public announcements of the structure.
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