World’s Largest Crypto Exchange Restructures To Avoid New Bans

[ad_1]

The news: The world’s largest crypto exchange will become a centralized entity to facilitate its cross-jurisdictional compliance, according to Finextra.

How we got there: Since launching in 2017, Binance does not have an official head office despite operating globally, which means it has struggled to gain regulatory approval anywhere. that is.

But over the past year, regulators have disrupted Binances’ operations by banning its services:

In June alone, authorities in Canada, Japan and the UK either shut down Binances operations or threatened not to register locally and meet their anti-money laundering standards. money. The exchange also recently announced that it would be halting some services in Singapore and is facing a US investigation into possible insider trading.

Under pressure from all sides, the cryptocurrency exchange is stepping up its compliance efforts to allay regulatory issues:

Binance hopes that centralizing its operations in a still undisclosed jurisdiction will help show regulators wherever it wishes to become a regulated financial institution with clear records of stakeholder ownership, transparency and risk controls, according to the report. Binance CEO Changpeng Zhao. Binance also recently hired a former Treasury criminal investigator as head of global money laundering reports and a former Europol dark web specialist to improve its audits.

Our take: The booming adoption of crypto is generating record revenues, but also puts the industry at the top of regulators’ concerns, pushing market players to boost their compliance efforts.

In the United States, Robinhood is doubling its crypto functionality after a record T2 in which crypto trading accounted for more than half of its transaction revenue. Coinbase also set a second quarter revenue record, while Binance saw a 65% increase in trading volume in September.

Higher transaction volumes make it more difficult to effectively monitor suspicious activity, which is increasingly problematic as regulators step up oversight. In response, market players will look to partnering or acquiring crypto regtechs to avoid operational bans that would slow their current growth.

Mastercard recently acquired crypto-monitoring startup CipherTrace to more easily identify illicit activity as it expands its crypto payments offering. Coinbase could be the next to acquire a regtech: In August, it set aside $ 4 billion in cash pending higher compliance costs.

[ad_2]