76 Billion A Day: How Binance Became The World’s Biggest Crypto Exchange | Mint

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76 Billion A Day: How Binance Became The World's Biggest Crypto Exchange | Mint

$76 billion a day: How Binance became the world's biggest crypto exchange.
The world's fastest-growing major financial exchange has no head office or formal address, lacks licenses in countries where it operates and has a chief executive who until recently wouldn't answer questions about his location.
Started just four years ago, Binance is the exchange giant that towers over the digital currency world, a crypto equivalent of the London, New York and Hong Kong stock exchanges combined. After a burst of growth, Binance processes more trades for cryptocurrencies such as bitcoin and ether each day, $76 billion worth, than its four largest competitors put together, according to data provider CryptoCompare.
The years of largely unfettered, unregulated growth for Binance in particular and the crypto industry broadly, however, are coming to an end.
Financial regulators increasingly worry that digital assets, until recently dismissed by some as a fad, have grown so quickly they now are systemically important. In an October speech, Bank of England official Jon Cunliffe brought up the 2008 subprime-mortgage-fueled crisis and said of crypto, "When something in the financial system is growing very fast, and growing in largely unregulated space, financial stability authorities have to sit up and take notice."
Binance is drawing the most regulatory attention. Authorities in a dozen countries have cautioned users in recent months the exchange is unregistered or not authorized to provide various services.
The Securities and Exchange Commission is looking into how Binance conducts business in the U.S., where it has many state licenses, according to former executives. The SEC has asked for a list of information from Binance's U.S. affiliate, including how it relates to the global organization, according to one of the executives. Meanwhile, the Department of Justice is examining whether Binance has abetted money laundering, one former executive said. Bloomberg News previously reported the DOJ investigation.
The SEC and the DOJ declined to comment.
The American market presents a major test for the crypto exchange, which has indicated it hopes to take its U.S. arm public in a few years. A former financial regulator hired to build out Binance's American business, called Binance.US, resigned in August just three months into the job.
Some former executives said they were concerned that control of the U.S. exchange's data sat with coders in China, where the company was founded. They said this created the potential for a TikTok-like problem, referring to efforts by the Trump administration to ban the social media platform over concerns its customer data was potentially accessible by the Chinese government, which TikTok denied.
Binance's founder and chief executive,  binance sebuah skrill Changpeng Zhao, said in an interview that the exchange needs to fall into line with regulators. That includes getting proper licenses, he said.
"We run a very legit business," he said, which has grown quickly because users trust it. But "if you look at cryptocurrency adoption world-wide today, it's probably less than 2%" of the population, Mr. Zhao said. "In order to attract those 98% of people, we need to be regulated."
Mr. Zhao said Binance is in the process of setting up local offices and a headquarters, steps that he previously dismissed as obsolete but that regulators want. He wouldn't say where. In August, أي تطبيق binance لاستخدام reddit said on its website that it had made user identity checks mandatory to prevent use of the exchange for illicit money flows.
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Representatives of Binance and Binance.US, which the companies say are separate entities, declined to comment on the SEC and DOJ probes. "We take a collaborative approach in working with regulators around the world and take our compliance obligations seriously," said a Binance spokeswoman, Jessica Jung. She said that "as Binance developed, crypto trading and regulation developed and vice versa."
A spokesman for Binance.US, Matthew Miller,  ਬੈਨੈਂਸ ਤਨਖਾਹ said, "We have robust protections to ensure that data can be accessed only for appropriate customer fulfillment, performance improvement or regulatory-requirement purposes." He said all U.S. customer data is stored on servers in the U.S.
Binance's lack of a fixed location has puzzled regulators because they don't know who would be responsible for overseeing it. Parent company Binance Holdings Ltd. is incorporated in the Cayman Islands. According to the Cayman Islands financial regulator, Binance isn't registered or licensed to operate a cryptocurrency exchange from the country. And Binance doesn't operate an exchange from there, said spokeswoman Ms. Jung.
Until September, however, Binance's website in Australia said that Binance Holdings was the entity providing cryptocurrency exchange services for  कौन सा बिनेंस ऐप Australian users. Ms. Jung called that "simply a clerical error."
Binance has 3,000 employees spread throughout the globe, Mr. Zhao said. Based on its trading volume and the transaction fees it charges, company insiders think that if Binance were public,  jaki procent zajmuje Binance it could be worth up to $300 billion, according to former executives.
That would make Mr. Zhao very rich. He said he is the largest shareholder of Binance.
A rock star in the crypto world, he has 3.9 million followers on Twitter, where he is known simply by his initials, CZ. The company's security staff in the past told him and other executives to decline to answer questions about their locations, according to the Binance spokeswoman, Ms. Jung.
She said Mr. Zhao has been transparent about his location recently, spending the past two years under the pandemic in Singapore. According to an acquaintance, he rides to meetings on an electric scooter.
Mr. Zhao, 44, was born in China and moved to Canada with his parents when he was 12, he said. After studying computer science, he worked in Tokyo and New York at financial firms, including Bloomberg LP, where he developed software for futures trading.
He first heard about bitcoin at a poker game in Shanghai in 2013, he said. Digital coins, minted by computer programs, had been around for a few years. They lacked the imprimatur of government-issued currencies but drew fans among the computer-savvy, including those disenchanted with the financial system after the 2008 crisis.
Trading them was difficult. There were few platforms, and  i-binance v ilebula prices were notoriously volatile. Hacks against exchanges such as Mt. Gox undermined confidence.
Mr. Zhao was captivated by the idea of a decentralized currency that could be used anywhere without banks or bureaucracy. "We can use that technology to increase the freedom of money for people all around the world," he said in the interview.
He sold his Shanghai apartment--for bitcoin--and worked for several crypto startups. With a group of other programmers, he launched Binance in 2017.
It initially concentrated on trading bitcoin and the myriad offshoots but didn't allow users to exchange digital coins for mainstream currencies. When it started, it needed no bank account and no headquarters, Mr. Zhao said.
Binance added nine languages to its website, to stand out against competitors using only English. It developed a platform that several traders said is easy to use.
Binance raised $15 million in a July 2017 initial offering of its own digital coin, called BNB. Other investors were mostly individuals based in China, said a 2017 prospectus laying out its business.
Users popped up from all over, including countries with less-developed financial systems such as South Africa,  and India.

Source: 76 Billion A Day: How Binance Became The World's Biggest Crypto Exchange | Mint

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