Binance CEO wants to 'work with regulators' as the exchange expands

Published at: July 27, 2021

Changpeng Zhao, the chief executive officer and founder of Binance, has said he wants the major cryptocurrency exchange to work with local regulators as it establishes regional headquarters.

According to a Tuesday report from Reuters, Zhao, also known as CZ, hinted Binance would depart from its decentralized approach to finance and wanted the exchange to coordinate with regulators as the company expands.

"We want to be licensed everywhere," said CZ. "From now on, we’re going to be a financial institution."

Zhao reiterated that he might be willing to step down as CEO should someone "with a strong regulatory background" be available. Last week at a SCB 10X virtual summit, CZ said he considered himself more of a tech entrepreneur, while an individual well versed in regulations might be more suited to lead the crypto exchange as it pivots "to structures more easily understood by regulatory compliance."

“I’m actually looking for a senior person with a strong compliance background, with a strong regulatory background to lead the entire organization," said CZ, adding:

“I’ve led the company for four years and it’s good, and we’ve got to go through this pivot [...] I don’t think I’m the best person to lead that effort. I think having somebody with a very strong regulatory background is actually better.”

The comments come a few days after CZ said Binance's US arm was exploring "the IPO route" for a public offering in the United States. As the U.S.-based company operates independently from the major crypto exchange, Binance has been subject to scrutiny by local regulators.

Cointelegraph reported the Internal Revenue Service and the Justice Department have reportedly launched an investigation into allegations Binance engaged in illegal trading activity for U.S.-based users. The Commodity Futures Trading Commission reportedly made similar claims against the crypto exchange as part of an investigation.

CZ dismissed the CFTC allegations from March, saying at the time the report had “no teeth.” Binance has said it takes a "collaborative approach in working with regulators around the world" and treats compliance obligations "very seriously.”

The potential move to establish regional headquarters is somewhat of a surprising statement for CZ, given the Binance CEO said previously said the crypto exchange has no headquarters. In November 2019, when reports circulated that authorities raided Binance's operations in Shanghai, the exchange denied such offices existed.

Though CZ currently lives in Singapore, the exchange has had connections to China, Japan, Malta, Seychelles, and the Cayman Islands. At the time of publication, it's unclear exactly where Binance calls home, as a number of employees live in different countries.

"Office and HQ are old concepts like SMS and MMS," said CZ in 2019. "Time is moving on..."