In the wake of a series of regulatory crackdowns in Asia, Europe, and even the tiny Cayman Islands, the CEO of the world’s largest crypto exchange announced a new outlook
Binance is “pivoting from reactive compliance to proactive compliance,” the CEO of the world’s largest cryptocurrency exchange by volume announced today.
In an August 6 tweet, Changepeng “CZ” Zhao announced the new policy shortly before releasing the news that it will no longer offer futures products to Hong Kong customers. Existing customers have 90 days to close their open positions.
“This is one of many proactive measures Binance is taking to help establish crypto compliance best practices worldwide,” Zhao added.
He followed this up with an apology, tweeting “short term pain… long term gain,” and claiming Binance would be “leading in volume, leading in compliance.”
The Hong Kong news is the latest in a series of retreats Binance has made recently in the wake of aggressive action by regulators around the world.
On July 30, Binance gave customers in Germany, Italy, and the Netherlands 90 days to wind down all futures and derivatives positions. Four days earlier, it announced plans to delist all trading in all isolated and margin trading pairs involving the euro (EUR), British pound (GBP), and Australian dollar (AUD). These changes take place on August 10 and 12.
This in turn followed announcements by regulators in Malaysia, the U.K., Japan, Thailand and even the Cayman Islands that Binance was not permitted to conduct business in their territories.
Compliance Tools
In a nod to the growing focus on anti-money laundering (AML) and countering the financing of terror (CFT) regulations by national and international regulators, Binance slashed the amount users with unverified (“basic”) identity accounts can withdraw to just 0.06 BTC per day — while announcing that verified customers can withdraw 100 BTC daily.
Binance also announced plans to shut off access to its new stock token trading platform in the European Economic Area and Switzerland in mid-July, offering users the opportunity to switch positions to German digital assets platform CM-Equity AG.
Binance also followed the lead of competitor FTX in July, clamping down on the staggeringly high levels of margin trading it offers, decreasing the maximum leverage from 100x to 20x.
Then on July 28, Binance introduced a tax reporting tool designed “to allow Binance users to easily keep track of their crypto activities in order to ensure they are fulfilling the reporting requirements laid out by their regulatory bodies.”
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