Regulators all over the world are pushing for tighter regulations.
In an effort to appease the global regulators Binance has announced plans to shift from a decentralized headquarters into a centralized HQ structure.
Changpeng Zhao explains that regulators often frown upon the decentalized nature of Binance’s current model, and that switching to a centralized model will help bolster regulatory confidence in the platform.
This comes as part of an effort to make Binance a financial institution, and not simply a crypto exchange.
Here’s more on the story:
— The Quill Press (@VinceQuill) September 16, 2021
— InvestingCube (@investing_cube) September 16, 2021
Crypto Briefing reports:
Binance launched in 2017 and has adopted a decentralized business model for years despite being a centralized business. It has various locations around the world.
With the decentralized model and no fixed headquarters, the exchange remained outside the jurisdiction of any one country. But with new plans to operate from a centralized headquarters, full legal registration is likely to be required.
Good article explaining why Binance is “dodgy” from CZ’s own mouth.https://t.co/eZ0IklrYE5
— Zatoshi ✪ (@iamZatoshi) September 16, 2021
"The regulators ask us 'where's your headquarters?' and our response is, 'well, we don't have a headquarters.' That doesn't go well with regulators. They don't know how to work with us. Sometimes they even think we are dodgy." https://t.co/ziTYxyZ350
— Crypto Briefing (@Crypto_Briefing) September 16, 2021
Zhao explains via The South China Morning Post:
“As we run a centralised exchange, we have come to realise that we need to have a centralised entity to work well with regulators,” said Zhao, in an interview with the South China Morning Post. “We need to have clear records of stakeholders’ ownership, transparency and risk controls.”
In building a centralised firm with headquarters, the sprawling exchange – with entities incorporated in the Cayman Islands but not for the purpose of running cryptocurrency business – would be disavowing the core ethos of blockchain, the backbone technology of virtual assets which seeks to disintermediate centralised authorities.
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