© Reuters
BEIJING – In a significant shift for the cryptocurrency industry, Binance, one of the world’s leading cryptocurrency exchanges, is facing intense regulatory scrutiny as it navigates the complexities of global markets. The exchange operates in a challenging environment, particularly in China, where, despite the official ban on cryptocurrency exchanges, Binance has seen significant trading activity from Chinese users.
Zhao Changpeng (CZ), who recently resigned as CEO of Binance, published a blog post clarifying that the company does not operate legally in China and has no plans to do so. This statement comes as it was revealed that Chen Guangying, Binance’s former legal representative in China, is now based in Europe.
To maintain its presence in the Chinese market, the exchange notably uses payment services such as WeChat Pay and Alipay for users’ KYC (Know Your Customer) processes. This strategy, however, led to regulatory complications. Binance was notably convicted of criminal charges in the United States and fined a hefty $4.3 billion for failing to adequately enforce anti-money laundering laws.
After CZ left, Richard Teng took over as CEO of Binance. Mr Teng brings extensive regulatory experience, which could prove vital as the company seeks to improve its compliance. Despite strict Chinese government regulations, including the Great Firewall, the Binance app remains accessible in mainland China without the need to use a VPN. This suggests that there may be a covert presence and that enforcement of the ban is less strict than officially stated.
As part of its global strategy and in response to the regulatory landscape, Binance has relocated its Chinese employees primarily to Dubai. The company has also closed local offices, but continues its targeted marketing efforts in the Chinese-speaking market.
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