Binance CEO Changpeng “CZ” Zhao said he’s willing to step down as CEO as the exchange moves to become a regulated financial institution.
During a virtual conference on Tuesday, 27th, Zhao stated that his departure isn’t imminent, but the company has a successor in place. He cited his lack of experience in running a regulated financial company as one of the main reasons for him stepping down.
Given that Binance is now the world’s largest digital currency exchange by trading volume and that it’s a China-based company, there has been increased pressure from regulatory authorities. The soaring number of traders and the mainstream adoption of cryptocurrency has resulted in ramped-up scrutiny as they seek to clamp down on any potential malpractice.
Regulatory Increases across the globe
Less than a month ago we saw the U.K. The Financial Conduct Authority brought in a complete ban on Binance, with British banks such as Natwest blocking the movement of money into Binance accounts. A number of other crypto firms withdrew their operations in the U.K. citing a failure to meet anti-money laundering requirements.
In the U.S., it was reported that the U.S. The Department of Justice and Internal Revenue Service were investigating federal charges, though this was something that Binance CEO Zhao chose not to comment on in any depth.
In other areas of the world, we saw regulators in Canada, Italy, and Japan clamp down on Binance’s operations, warning against interacting with the app. It’s difficult to say if there will be further regulations, but if the company goes public then one might expect regulatory standards will be upheld to meet the standards of countries all over the world.
Binance keeping up with the times
Binance was one of the first companies to start offering shorts on cryptocurrencies. However, the company had to reduce the maximum leverage on offer, as borrowed funds were leaving clients with substantial losses. Trading on futures contracts is an extremely high-risk move and given how volatile the market is, it’s increasingly dangerous.
Another issue that the exchange faced recently was related to its stock tokens, which were digital versions of shares for major companies like Tesla, Apple, and Coinbase. Binance was attempting to broaden its offerings, shifting its commercial focus onto other products.
This year has been the best for crypto. As such, there is a lot happening with a lot of moving parts, especially for the biggest crypto exchange in the world. So, it’s important that Binance focuses on its fundamentals, customer retention and offering the digital currencies customers desire.