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Binance CEO says ‘compliance is a journey’ as world’s largest crypto exchange faces growing crackdown

Binance CEO says ‘compliance is a journey’ as world’s largest crypto exchange faces growing crackdown

07 Jul 2021

Changpeng Zhao, CEO of Binance, speaks during a TV interview in Tokyo, Japan, on Thursday, Jan. 11, 2018.

Akio Kon | Bloomberg | Getty Images

The boss of Binance on Wednesday said the cryptocurrency exchange hasn’t gotten everything right and has plenty of room to grow, following a crackdown from regulators around the world.

“Compliance is a journey – especially in new sectors like crypto,” Changpeng Zhao, CEO of Binance, said in a blog post.

“The industry still has a lot of uncertainty,” he added. “We also recognize that with the growth comes more complexity and more responsibility.”

Last month, the U.K.’s Financial Conduct Authority restricted Binance from carrying out regulated activities in the country. Binance’s U.K. unit withdrew its application to register with the regulator in May due to not meeting anti-money laundering requirements.

Binance, the world’s largest crypto exchange by trading volumes, was ordered to add a notice in a prominent place on its website and app showing U.K. users that it is not permitted to carry out any regulated activity in the U.K.

Meanwhile, regulators in Canada, Japan and Thailand have also issued warnings to the company.

Japan’s Financial Services Agency said the crypto exchange was operating in the country without its permission, while Canada’s Ontario Securities Commission accused it of failing to comply with local regulations.

Last week, Thailand’s Securities and Exchange Commission filed a criminal complaint against Binance, alleging the firm was operating in the country without authorization.

“As a four-year-old startup, Binance still has a lot of room to grow,” Zhao said. “Binance has grown very quickly and we haven’t always got everything exactly right, but we are learning and improving every day.”

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“We hope to clarify and reiterate our commitment to partner with regulators, and that we are proactively hiring more talent, putting in place more systems and processes to protect our users,” he added.

Zhao said Binance was taking a number of steps to improve its regulatory compliance. Those include ramping up hiring, partnering with anti-crime organizations and localizing operations in markets like the U.S.

Increased regulatory scrutiny has weighed on the nascent crypto market in recent months. China has cracked down on digital currency mining amid concerns over its environmental impact, for example.

Cryptocurrencies had a solid start to the year, with bitcoin rallying to an all-time high of almost $65,000 in April. But they’ve since fallen sharply, with the overall crypto market capitalization losing more than $1 trillion in the last two months.