No more decentralization for Binance, but it will work for the ‘wild west’

“We have realized that we need a centralized entity to work well with regulators.”

In a recent interview with the South China Morning Post, Changpeng Zhao, founder and CEO of Binance, agreed to restructure the exchange with a centralized headquarters.

Interestingly, this will be completely contrary to the old CZ belief that the “future of the industry lies in decentralization”, with the possibility of DeFi taking over centralized exchanges.

However, in many ways, this U-turn is not unexpected. Especially in the midst of a global crackdown since Binance doesn’t want to look “dubious”. According to Zhao,

“We need to have a centralized entity behind it with clear boundary tables, clear investors, a proper board, proper governance, very transparent KYC, AML (anti-money laundering) and risk controls.”

This change in position also occurs as a consequence of a possible initial public offering (IPO) within 2-3 years. With Coinbase blocking horns with the SEC in the US, Binance wants to move to the US market without regulatory concerns. The exchange also recently agreed to Brian Shroder as the new chairman of Binance.US.

CZ further confirmed that Binance has been in talks with regulators around the world. In another interview last week, the CEO had posted that Binance Asia Services, which operates Binance.sg., Applied for a license after the Monetary Authority of Singapore put the global exchange on the investor watch list.

Now, according to the executive,

“We need to have clear records of stakeholder ownership, transparency and risk controls.”

Binance.com is a global entity that is reportedly registered in the Seychelles and incorporated in the Cayman Islands. With the proposed change, Binance will ironically change its position on decentralization.

Binance has been in the news a lot after receiving a regulatory hammer in multiple jurisdictions. These include the United States, the United Kingdom, and Singapore, among others.

“Four years ago, we wanted to adopt decentralization, but we operate a centralized exchange. We need a change. We need to improve. We are making those changes to make it easier for regulators to work with us. “

However, despite these headwinds, Binance remains the world’s largest cryptocurrency exchange on CryptoCompare. In fact, over 51% of the cumulative trading volume over the past 24 hours, at press time, had passed through Binance.

Now, while some speculate that the exchange will lose trading volume after the structure change, that remains to be seen.

Finally, Binance also confirmed that it will continue its wave of hiring regional CEOs as part of its regulatory efforts. It is also on its way to becoming a financial institution, with Zhao confirming:

“We want to be licensed everywhere … From now on, we will be a financial institution”

This is a machine translation of our English version.

Original Source