Both the Google Play Store and the Apple App Store in India have reported the reappearance of the Binance cryptocurrency exchange after a seven-month absence. As a result of the exchange’s registration as a reporting entity with India’s Financial Intelligence Unit (FIU-IND), the applications and website of the exchange were once again made available to users on August 15.
As part of the efforts to prevent money laundering, registration is a constitutionally mandated step that must be taken by all cryptocurrency exchanges that are active in India.
FIU-IND blocking the operations of Binance earlier
Binance was one of nine cryptocurrency platforms that were blocked by the Financial Intelligence Unit of India (FIU-IND) earlier this year owing to their failure to comply with local legislation.
Following the failure of these platforms to register with the Indian law enforcement body, the block was implemented during the month of January.
In April, there were reports that stated Binance intended to pay a fine of $2.25 million in relation to its earlier noncompliance; however, the exchange has not acknowledged whether or not this amount was paid.
Binance is now aligning its operations to India’s compliance
Binance will comply with the requirements of the Indian authorities by enforcing anti-money laundering (AML) rules and implementing steps to combat the financing of terrorism (CFT). Binance’s registration has now been completed.
Validation of identity protocols, such as Know Your Customer (KYC), is included in the compliance programme of the exchange. Additionally, the exchange has a Financial Crimes Compliance team that provides support for investigations into crypto-related offences.
Richard Teng, the Chief Executive Officer of Binance, referred to the registration as a regulatory milestone for the exchange. He emphasised the significance of the Indian market, which, according to Chainalysis, is one of the top five markets in the world in terms of the estimated amount of cryptocurrency transactions. The registration of Binance operations in India is a component of the company’s larger goal to conform to local legislation in a number of different jurisdictions. Recently, the exchange was successful in obtaining a licence to operate as a virtual asset service provider (VASP) in Dubai.
Trading, purchasing, and selling of cryptocurrencies may all be done using Binance, which is a digital wallet service that operates online. The fact that Binance is a globally recognised software also means that its security features are of a very high standard and are always being improved. This, in turn, ensures that the coins customers keep in their wallets are safe and secure.
Richard Teng, the former CEO of the Abu Dhabi Global Market, succeeded Changpeng Zhao as CEO of Binance in November 2023. Teng is a well-known and successful professional who has made important contributions to finance and regulatory affairs. He has rich experience and skills and has played significant roles in defining the financial environment, notably in fintech, compliance, and risk management. His innovative leadership and strategic expertise have gained him industry prominence as a thought leader. Teng has exhibited a consistent dedication to pushing innovation, encouraging industry growth, and establishing strong regulatory frameworks throughout his career. As a renowned person in the financial sector, he continues to inspire and influence constructive change, leaving an indelible impact on the developing landscape of global banking.
Having worked in the financial services and regulatory industries for more than thirty years, Teng will assume the CEO position after being Binance’s global head of regional markets. He aims to support blockchain and crypto adoption by actively engaging both mainstream and Web 3 stakeholders.
A native of Singapore, Teng studied at Nanyang Technological University, where he graduated with First Class Honours in Accountancy. He earned his master’s degree in Applied Finance from the University of Western Australia. He has completed The Wharton School’s Executive Leadership Programme.
Richard Teng – Career
Teng began his career in 1994 as director of corporate finance at the Monetary Authority of Singapore, where he stayed for 13 years until joining the Singapore Exchange as chief regulatory officer in 2007.
Teng is a former CEO of the Abu Dhabi Global Market, the financial services regulator in the UAE capital.
He served as a part-time Board Director of Lulu Financial Group for one year and eight months.
He worked as a freelancer for Blockchain Association Singapore (BAS) as an Advisory Board Member for 2 years and 5 months.
From July 2021, he was a member of the Global FinTech Institute’s worldwide Council. It has already been 2 years and 5 months.
Teng has been promoted to the position of CEO of Binance. Most recently, he served as Binance’s global head of regional markets. Teng is one of the few top executives who remained with Binance after the US Securities and Exchange Commission brought 13 charges against the cryptocurrency exchange and its founder, Changpeng Zhao.
Richard Teng – Monetary Authority of Singapore
He was the Director of Corporate Finance at MAS for 13 years. As a result, he gained regulatory knowledge in the banking, insurance, and capital markets industries. He was active in a wide-ranging reform of Singapore’s financial services business in the late 1990s, pushing moves to develop private banking and capital market sectors. He was in charge of creating and implementing the Securities and Futures Act, as well as building the regulatory framework for REITS, business trusts, and trust companies. He also managed the Singapore Code on Takeovers and Mergers, which governs mergers and acquisitions in Singapore.
Richard Teng – Singapore Exchange
He spent 7 years and 6 months as the Chief Regulatory Officer at Singapore Exchange (SGX). Teng previously served as Senior Vice President, Head of Issuer Regulation, Chief of Staff for Risk Management and Regulation, and Head of Regulation at SGX. He was in charge of the Regulation Group, which works closely with the Monetary Authority of Singapore (MAS) to maintain a fair, orderly, and transparent market. The Group is responsible for developing policy, structure, and rules for listing, trading, and clearing, as well as regulatory solutions for new products and services. The Group is in charge of overseeing the rules regulating listing, trading, and clearing, as well as accepting listing applications and members and monitoring and enforcing ongoing compliance with the regulations. Issuer Regulation, Catalist Regulation, Membership Supervision, Surveillance, Regulatory Development and Policy, and Legal are the Group’s units.
Richard Teng – Abu Dhabi Global Market
Teng joined Abu Dhabi Global Market in March 2015, bringing more than two decades of regulatory leadership and capital markets expertise to the banking industry. As CEO, he was in charge of and directed the establishment and administration of ADGM’s financial services regulatory and supervisory framework to promote a fair, open, and transparent financial market.
Teng is an accomplished executive with over three decades of expertise in financial services and regulatory affairs.
Binance, which was founded in 2017, is the world’s largest cryptocurrency exchange, with around 150 million members.
Teng joined the world’s largest crypto exchange in 2021 as the CEO of Binance’s Singapore Company two years ago.
He remained as Singapore CEO for five months until being appointed as regional head of Europe, Asia, the Middle East, and North Africa in April 2023. He managed regional teams to develop strategic alliances, build an ecosystem of innovation, and expand the Bitcoin ecosystem inside their respective areas in this capacity.
Teng was eventually promoted to head of regional markets in May 2023 before being named CEO of Binance, barely more than two years after joining the company.
Richard Teng – Binance
Richard Teng – Introducing the Binance Web3 Wallet
Teng expressed his gratitude for the opportunity to assume the job of CEO, adding that he would focus on ensuring Binance’s 150 million users of the company’s financial strength, security, and safety.
His priority will be to reassure users that they can stay confident in the company’s financial soundness, security, and safety, as well as working along with authorities.
Teng, who joined as Singapore CEO of Binance in 2021, has a challenging task ahead of him. The exchange’s native cryptocurrency, BNB, is down 15% following Zhao’s departure, indicating declining client trust. Users withdrew a total of $1.3 billion from the Binance platform, with other cryptocurrencies and blockchain protocols such as Solana and Polygon also suffering losses.
Teng faces a difficult task in restoring Binance’s reputation.
Teng’s initial responsibility will be to try to repair the company’s damaged public image. His priority is to reaffirm the exchange’s financial strength, security, and safety to the exchange’s 150 million members. Other major areas of emphasis for him will include collaborating with regulators to uphold high standards globally and working with partners to drive growth and adoption of Web3.
Teng stated in a recent post, “To ensure a bright future, I intend to use everything I’ve learned over the past three decades of financial services and regulatory experience to guide our remarkable, innovative, and dedicated team.”
His priorities will be to:
Reassure 150 million users about the company’s financial strength, security, and safety.
Collaborate with regulators to uphold high standards globally that foster innovation while providing important consumer protections.
Work with partners to drive Web3’s growth and adoption.
Under his leadership, ADGM was named Financial Centre of the Year (MENA) by Euromoney’s Global Investors Group in both 2016 and 2017, collecting back-to-back awards.
Deloitte and the Global Fintech Hub Federation have named it the best Fintech Hub in the Middle East and North Africa.
Teng, who has decades of regulatory leadership and financial sector growth expertise, is a frequent worldwide speaker, particularly on FinTech regulations and Belt and Road initiatives.
FAQs
Why did Changpeng Zhao step down as CEO?
He stepped down on November 21, 2023, as part of a $4.3 billion settlement with the U.S. Department of Justice (DOJ) to resolve allegations of anti-money laundering (AML) violations and sanctions violations.
Who is the new CEO of Binance?
Richard Teng is the new CEO of Binance.
Is Binance 100% safe?
No, Binance is not 100% safe. No cryptocurrency exchange is completely immune to hacks or other security breaches. However, Binance is considered one of the safest exchanges in the world.
The U.S. government recently imposed a substantial $4 billion fine on Binance, the world’s largest cryptocurrency exchange. This penalty was a consequence of confirmed serious protocol failures, including frequent violations of U.S. sanctions. Binance’s CEO, Changpeng Zhao, a prominent figure in the crypto industry, resigned on November 22 in the wake of these developments.
Binance – Changpeng Zhao (Founder and Ex-CEO), Richard Teng (Current CEO)
The cryptocurrency market, highly sensitive to even minor disruptions, was rattled by this news, impacting thousands of traders worldwide who utilize Binance for their crypto transactions, whether legally or not.
Changpeng Zhao attributed his resignation to acknowledging “mistakes” and acting in the best interest of the company. In Seattle, he pleaded guilty to violating the Bank Secrecy Act and agreed to a $50 million fine as part of a legal arrangement. In his statement on November 22, Zhao expressed the emotional difficulty of stepping down but emphasized its necessity for the community, Binance, and himself.
Richard Teng, formerly Binance’s Global Head of Regional Markets, was appointed as the new CEO. Zhao highlighted Teng’s extensive 30-year financial services and regulatory experience in Abu Dhabi and Singapore.
Despite stepping down, Zhao will remain a Binance shareholder, retaining significant influence over the company he founded in 2017. He plans to focus on Decentralized Finance (DeFi), potentially mentoring aspiring entrepreneurs and taking a break to spend time with his family.
Binance’s Legal Woes: A Closer Look at Charges
Binance faced charges for failing to maintain an effective anti-money laundering program, operating an unlicensed money-transmitting business, and violating the International Emergency Economic Powers Act. U.S. Treasury Secretary Janet Yellen revealed that Binance did not report suspicious transactions, allowing illicit actors involved in criminal activities, including terrorism, to transact freely on the platform. The settlement agreement with the Treasury’s Financial Crimes Enforcement Network and the Office of Foreign Assets Control imposed a total penalty exceeding $4 billion, marking it as the largest enforcement action in the Treasury’s history.
Binance has encountered various legal and compliance challenges across multiple countries, navigating them under Zhao’s bold leadership. The company has often proclaimed its commitment to regulatory support while disengaging from jurisdictions attempting to regulate or investigate its operations. Nevertheless, the U.S. Treasury accused Binance of falsely claiming its exit from the U.S. years ago and maintaining connections with the country, including retaining U.S. users.
In June of this year, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Binance, alleging the commingling and diversion of customer assets to a third party linked with Zhao. The exchange was accused of violating federal securities laws by “illegally conducting unregistered offers and sales of securities to U.S. investors.”
The impact on crypto investors and the sector is significant. While U.S.-based individuals are now prohibited from using the Binance platform, the enforcement of this policy under the next CEO remains uncertain. Binance has been instructed to entirely withdraw from the country and will be closely monitored moving forward. The native cryptocurrency of the BNB blockchain ecosystem, BNB, experienced a more than 10% decline to approximately $234 following Zhao’s resignation but began a gradual recovery.
As regulatory pressure on crypto exchanges serving U.S. customers increases, these platforms may choose to comply with the country’s registration requirements, even if only on paper, or opt for a complete exit. Some exchanges may attempt to evade legal action by establishing headquarters in foreign tax havens. For crypto investors seeking to avoid monitoring by centralized authorities or the U.S. government, the riskier DeFi route or transactions through non-regulated decentralized exchanges (DEXs) could be explored.
In a noteworthy turn of events, Zhao, in December of the previous year, publicly criticized the collapse of the FTX crypto exchange led by Sam Bankman-Fried. Zhao drew attention to the alleged “reprehensible misuse of customer funds” at FTX. However, almost a year later, he issued an apology for his own actions and stepped away from Binance, a crypto exchange facing severe condemnation from U.S. regulators for criminal practices. This serves as another example of how swiftly the illusion of stability can fracture within the volatile crypto sector.
Indian Minister’s Lesson and Government Skepticism
As Changpeng Zhao (CZ) stepped down from his role as the chief executive of Binance, the Union Minister of State for Electronics and Information Technology, Rajeev Chandrashekhar, highlighted a crucial lesson to be gleaned from the situations involving Binance, FTX, and other crypto companies.
In a statement on X, the minister emphasized that utilizing new technology to break the law does not categorize one as a disrupter; rather, it designates them as a criminal. He added that the skeptical stance of the current government towards crypto speculation has safeguarded countless Indians from potential crypto meltdowns and losses.
The legal action against Binance unfolded nearly a year after another major exchange, FTX, faced a meltdown, resulting in significant losses for crypto investors globally. Investigations by the Department of Justice and other authorities in the US and various jurisdictions had probed Binance for years over alleged malpractices and violations of local financial laws. On Tuesday, a US court charged Binance with violations of anti-money laundering and sanctions laws, imposing a hefty settlement of $4.3 billion, marking one of the largest settlements in the country.
As part of the deal, CZ will individually pay $50 million and step down as CEO after being found guilty of violating the Bank Secrecy Act in a Seattle court. Binance was additionally accused of lacking a proper anti-money laundering program, running an unlicensed money-transmitting business, and violating sanctions laws, as detailed in court filings. The minister’s tweet, coupled with India’s already cautious stance on the cryptocurrency class, hints at potential upheaval in the domestic market, according to industry insiders.
Indian Crypto Landscape: Regulatory Scrutiny and Investor Shift
Taxation on Cryptocurrency Explained
Unocoin’s co-founder and CEO, Sathvik Vishwanath, noted that CZ’s resignation and the anti-money laundering violations might heighten regulatory scrutiny of crypto activities in India, prompting authorities to reevaluate and strengthen the regulatory framework. This, in turn, could increase compliance pressure on domestic stock exchanges in India. Sumit Gupta, co-founder and CEO of CoinDCX, added that the impact on Indian investors could be significant, given that many have shifted to foreign exchanges like Binance for trading, especially following the implementation of a 30% capital gains tax and 1% tax deducted at source by the Indian government last year. A recent study by the ESYA center revealed a notable shift of 3-5 million Indians and over 90% of the traffic to offshore exchanges.
Manhar Garegrat, the Country Head for India and Global Partnerships at Liminal, a platform specializing in wallet infrastructure and custody solutions, remarked on the departure of Zhao, the CEO of Binance. According to Garegrat, this marks a crucial moment in the global crypto landscape, signifying a shift towards enhanced transparency and a commitment to regulatory compliance.
As the predominant offshore digital assets exchange, Binance has been under intense regulatory scrutiny in various jurisdictions, particularly in the United States. The decision of CZ to step down and pass the CEO baton to Richard Teng serves as a clear indication that Binance is taking these regulatory concerns seriously. The exchange is demonstrating its commitment to collaborating with regulators to establish a more compliant operational framework.
This strategic move is positive for Binance and the entire crypto industry, showcasing that even the largest and most influential players are accountable to the law. It is expected to inspire other exchanges to follow suit, contributing to the legitimization of the crypto space and paving the way for broader adoption. Furthermore, Zhao’s departure is likely to address concerns about the leadership structure within Binance. By entrusting leadership to a new figure, Binance is signaling its dedication to a balanced leadership approach, not relying solely on any individual.
Shivam Thakral, the CEO of BuyUcoin, India’s second-longest-running digital asset exchange, reported that the crypto market has rebounded following the recent regulatory actions against Binance, aligning with the overall recovery of the crypto market. In the immediate aftermath of CZ’s (Changpeng Zhao) announcement of stepping down, the digital asset market experienced a significant downturn, with the overall crypto market cap dropping below the $1.4 trillion mark. However, the market has since recouped most of its losses, spearheaded by BTC and ETH, leading to the crypto market cap swelling to $1.42 trillion.
Looking forward, the change in leadership at Binance has the potential to bring a fresh management perspective, guiding the crypto giant toward a more mature phase of growth. Nevertheless, short-term market volatility is anticipated as traders closely monitor the unfolding developments between Binance and the Department of Justice (DOJ).
Global Crypto Landscape: Maturation and Accountability
Richard Teng, the newly appointed CEO of Binance, boasts an impeccable track record in financial services and regulatory compliance. His expertise positions him well to assist Binance in addressing regulatory issues and fostering a more compliant environment within the organization.
In summary, this event holds significant weight for the global crypto landscape, signifying the industry’s maturation and a growing sense of accountability to stakeholders. This positive development is anticipated to result in increased transparency, heightened regulatory compliance, and a more widespread adoption of digital assets.
FAQs
Is Binance under threat?
Yes, Binance faces several threats, including regulatory scrutiny, legal challenges, and stiff competition from other cryptocurrency exchanges.
Did the owner of Binance lose money?
Binance is set to pay $4.3 billion in one of the largest corporate deals in US history. As part of the deal, Zhao will pay a $50 million fine and step down as CEO.
What is the biggest risk in crypto?
The biggest risk in crypto is its volatility and regulatory uncertainties. Cryptocurrency prices can fluctuate wildly, and there is no guarantee that they will always go up.
FTX is a cryptocurrency exchange that was founded in May 2019 by Sam Bankman-Fried and Gary Wang. It was built by the traders and for the traders. While it has its official headquarters in the Bahamas, FTX is managed from the US. Its biggest offices are located in Chicago and Miami.
FTX, along with its competitor, Binance, are international exchanges that process the majority of cryptocurrency trades around the world. Cryptocurrencies are, essentially, a publicly available blockchain that records ownership without the control of any central authority. Following this, FTX follows the bare minimum regulation that exists in the US. However, a bulk of its money flows through its books, unconstrained by regulatory requirements.
Comparison of Global Total Cryptocurrency Gains (2020–2021)
What Happened to FTX?
FTX’s own cryptocurrency is known as FTT. Sam Bankman-Fried, FTX’s co-founder, held billions of dollars’ worth of its own cryptocurrency, FTT, through his other crypto hedge fund, Alameda. This was a claim that appeared in CoinDesk, a crypto industry news service. It also stated that Alameda had been using it as collateral in other loans. This news triggered a crisis, furthering the thought at, if this being the case, a fall in FTT’s value would damage both businesses because of their shared ownership. Further, it prompted questions and fears about the validity of the whole institution, as FTT itself has no value beyond FTX’s longstanding promise to buy any tokens at USD 22.
What added to the burgeoning fear was a tweet by Binance’s Chief Executive Changpeng Zhao which said that his company was selling its FTT holding worth approximately USD 500 million because of recent revelations about FTX. Following this announcement, the value of FTT collapsed and immediately the firm suffered a withdrawal surge as customers began withdrawing funds. Within a period of three days, users withdrew USD 6 billion in crypto tokens from FTX.
Within a couple of days, Changpeng Zhao of Binance announced that his company had reached an agreement to bail out FTX by buying the company with the condition that Binance has the discretion to pull out of the deal at any time. The very next day, Zhao announced that his firm was backing out of the deal. He said – “The issues are beyond our control or ability to help.” Binance claimed that discovered discrepancies in the due diligence process, as well as the US, had launched regulatory investigations into FTX.
Future of FTX
According to Bloomberg, Bankman-Fried said his firm FTX, needed USD 4 billion to stay solvent with a funding gap of USD 8 billion. However, after Binance walked away from the potential distress deal, it is unlikely that FTX will find other backers.
Co-founder and Chairman of Coin Metrics, Nic Carter, said, “Sam needs to abandon his delusions of cobbling together some deal. There’s no one on earth that’s going to bail FTX out, unless the Fed is inclined to do it. It’s just not going to happen.” If FTX folds, it could have a serious and long-lasting negative impact on individual investors, venture capitalists and even other crypto businesses.
Carter continues, “There are going to be big victims here. There will be a lot of innocent victims, not just individuals but also other firms like fintech firms, crypto firms that were providing access to end users. There is going to be some extremely tough knock-on effects.”
The immediate effect of the FTX crisis has caused bitcoin to plummet from USD 20k a coin to USD 16.5k a coin with the wider market falling 5% according to CoinMarketCap. Companies and protocols that have FTX exposure are proving their liquidity. If the FTX exchange fails and closes, there is no clarity on whether any of the bitcoin that function on that protocol would be retrievable. It could lead to a loss of millions of dollars, overnight.
The value of the entire crypto market is currently at USD 800 billion from the last year’s November high of USD 3 trillion. The fall was the mixed result of crypto-specific events and macroeconomic issues. The industry, which has been struggling to convince regulators, investors and customers of its reliability and trustworthiness has suffered a setback that will take a long time to reverse if it does. The overall financial market is quite resilient to the ups and downs of the crypto market, which is a very insignificant systemic threat.
The Aftermath of FTX Downfall
Bitcoin Crashes as FTX Collapses
As unregulated as the crypto market currently is, this sudden collapse has triggered action and the rising concern of the need for a regulatory authority.
The Crackdown
Regulators are working towards freezing parts of FTX’s business, while other divisions file for insolvency or preparing for halting operations.
Scrutiny on Investors
Venture capital firms as well as investment funds which invested heavily in FTX are also facing inquiries.
Sponsorship Deals of Sports
FTX’s collapse has put sports sponsorships worth hundreds of millions of dollars at risk, right from the naming rights for an NBA arena to the patches on MLB Umpire’s uniforms.
Conclusion
Historically, cryptocurrencies have rebounded to new heights following every calamity. It seems to make other crypto ventures stronger. However, in the face of the current turmoil, investors might hold on to their crypto coins on exchanges for a much shorter period of time. They might also only use exchanges as transactional vehicles. The core principals of the other crypto ventures remain unchanged, as recent turmoil may represent a unique opportunity for bullish investors, but with different challenges. Time will tell.
FAQs
What is FTX?
FTX is a cryptocurrency exchange that was founded in May 2019 by Sam Bankman-Fried and Gary Wang. It was built by the traders and for the traders.
How did the FTX crisis affect bitcoin?
The immediate effect of the FTX crisis has caused bitcoin to plummet from USD 20k a coin to USD 16.5k a coin with the wider market falling 5% according to CoinMarketCap.
How much money did FTX need to stay solvent?
According to Bloomberg, Bankman-Fried said his firm FTX, needed USD 4 billion to stay solvent with a funding gap of USD 8 billion. However, after Binance walked away from the potential distress deal, it is unlikely that FTX will find other backers.
Changpeng Zhao is the founder of the world’s largest crypto exchange Binance. He has turned out to be a true inspiration to many since the company’s inception in 2017. In a span of a few months, Zhao turned the company into the largest exchange platform for the crypto trade. Changpeng Zhao, popularly known as CZ, was valued as the 11th richest person in the world. Recent estimates revealed that his net worth is around $96 billion.
From selling his apartment to buy cryptocurrencies to turning out to be one of the richest people in the world, the life of CZ is something inspiring and exciting to learn about. Let us see where and how Changpeng Zhao’s journey started, his early living and his life as the CEO of Binance.
Changpeng Zhao is a Chinese-Canadian business person who was born in Jiangsu province of China on 10th September 1977. Both of his parents were teachers. Zhao’s father was working as a professor in a university and he was exiled after getting labeled as “pro-bourgeois intellect”. As a result, the family moved to Vancouver, Canada by the late 1980s. During his teenage years in Canada, Zaho started working part-time to support his family’s expenses. He used to work at McDonald’s and a few gas stations after his school.
Changpeng Zhao – Initial Career
Changpeng Zhao was a computer science graduate from McGill University, Montreal. After graduation, he started his career as an intern in Tokyo. He worked for a trader on Tokyo Stock Exchange, who asked Zhao to develop software for matching orders in the stock trade. After the initial experience, he joined the Bloomberg Tradebook LLC in 2001 and worked as the head of Futures Development sector for the next 4 years.
Later in 2005, Zhao co-founded a company called Fusion Systems. The company was involved in providing IT solutions and other business consultancy services. Changpeng Zhao remained as a partner in Fusion Systems until the end of 2013 and then entered the world of Crypto.
Changpeng Zhao – Professions in the Crypto World
Changpeng Zhao – Binance Founder
By 2013, Changpeng Zhao joined as the head of the development team in Blockchain. Blockchain.com is a company that provides various cryptocurrency-related services. It created a cryptocurrency wallet that has dealt with almost 28% of the bitcoin transactions between 2011 and 2020. Zhao worked in this company for developing software related to crypto wallets.
After working in Blockchain for about a year, Zhao resigned from the company and joined as the Chief Technical Officer in a company named OKCoin. OKCoin, like Binance, was a Crypto Exchange company and is considered to be one of the largest in the world. But Zhao felt that the company doesn’t suit his vision on crypto exchange and he decided to quit his position.
Coming out of OKCoin, CZ founded a company named Bijie Tech. This company provided crypto exchange services to people in Shanghai. It kept serving people for two years from 2015 to 2017, until one day, all the platforms and websites of Bijie tech went dead. There was no information given or clarified from the management regarding the disappearance of the company. But with the death of Bijie Tech emerged a mighty company named Binance.
Changpeng Zhao – Journey as Binance CEO
Binance Logo
Changpeng Zhao’s interest in cryptocurrencies started as early as 2014 while he was playing a poker game with his friend. During that time he got to know about Bitcoin and started investing in it. He even sold his house to buy Bitcoins. Such was his interest in the crypto market. Zhao added experience to his interest by working in various companies.
Bijie Tech slowly disappeared only to bloom as Binance. All the top management and resources of the former company structured Binance. Changpeng Zhao has remained the CEO of the company since its formation in 2017. This cryptocurrency exchange platform is the largest exchange in terms of trading. Binance made Zhao a billionaire within just 180 days of its operation. He has grown to be the 11th richest person in the world with his net worth estimated at $96 billion.
Zhao faced myriad challenges during these 5 years in Binance. China’s stringent policies on crypto forced him to shift the headquarters from the Chinese land to Caymen Islands. The United States Department of Justice has put Binance under investigation for money laundering offenses. Similarly, many other countries like Germany and UK have also raised legal actions or warnings against the company. In fact, in 2019, there was a huge theft of bitcoins from Binance whose value stood around $40 million. Zhao faced all these challenges explicitly including the bitcoin theft. He made sure that the company makes up for all the losses and never let his customers down.
Conclusion
The story of Changpeng Zhao is truly inspiring. Everything we think as impossible was made possible by him. Cryptocurrencies and their market are just getting popular and most people are less knowledgeable or still unaware about it. In such a situation CZ created his own pathway and set a benchmark for aspiring leaders. Zhao created a belief that it is possible to start a business and make it the world’s largest in 5 years. He showed that becoming one of the richest in the world would take just a couple of years. He also proved that despite any hardships from the superpower countries, it is possible to flourish a business in every part of the world. A lot to grasp from such a stimulating personality.
FAQs
Who is Changpeng Zhao?
Changpeng Zhao is the founder of the world’s largest crypto exchange Binance.
When and where was Chengpeng Zhao born?
Zhao was born on 10th September 1977 in Jiangsu province of China.
What is the work of Binance?
Binance is the cryptocurrency exchange platform that helps people trade cryptos for assets.
Which is the largest crypto exchange platform?
Binance is the largest crypto exchange platform in the world.
Company Profile is an initiative by StartupTalky to publish verified information on different startups and organizations. The content in this post has been approved by Binance.
The advent of cryptocurrencies spawned a slew of crypto exchanges to make trading and purchasing cryptos easier. Because cryptocurrencies are digital assets, investors have a variety of problems exchanging them on current networks. One of the key reasons for the creation of many exchanges is this.
A small number of bitcoin exchanges have suddenly grown into multibillion-dollar businesses. The rise in popularity of bitcoin has transformed previously small-time platforms into powerhouses that generate millions of dollars in income every day.
The staggering profits are a slap in the face to stock and currency trading companies that have chosen to stay out of the digital asset industry. They must watch while start-ups with just four years on the market brag about huge profits. What remains to be seen is, how long the euphoria will persist.
Know more about the company profile, startup story, founder, business model, etc., of Binance by reading this article further.
Binance is a cryptocurrency exchange platform that mixes finance and digital technologies. Binance is a company that provides blockchain and cryptocurrency infrastructure. The company allows users to trade digital currency pairings on the market while retaining security and liquidity, allowing them to transact safely and efficiently with anybody, at any time and from any location.
Trading and finance, education, data and research, social good, investment and incubation, decentralization and infrastructure solutions, and other crypto products and services are all part of its portfolio.
In its whole journey, to date, Binance has introduced two cryptocurrencies that it created: Binance Coin (launched June 2017) and Binance Smart Chain (launched September 2020). The Binance Smart Chain uses “Proof of Staked Authority,” which is a hybrid of proof of stake and proof of authority. 21 validators have been approved. Binance Coin was the third-largest cryptocurrency by market value in 2021. Binance users may use Binance Coin to pay fees on the exchange.
Binance is a FinTech firm that provides clients in over 180 countries with a variety of crypto-related goods. The Binance exchange, which allows both retail and institutional investors to purchase, sell, and trade bitcoin, is the company’s main product. On the site, you may trade over 500 different currencies.
Binance is also distinguished from other exchanges by the large number of trading choices it provides. Stop limit or market orders, leverage trading, and peer-to-peer trading are some examples. Users can also contribute their current crypto assets to one of Binance’s organizations. The platform does not take a cut, and all revenues are donated to the user’s preferred charity.
Binance – Latest News
9th January 2022 – While probing a multi-million dollar scandal connected to fraudulent online investing mobile apps, Pakistan’s Federal Investigation Agency issued a warning to a major cryptocurrency exchange, Binance,
“An order of attendance has been issued to Hamza Khan, the general manager/growth analyst at Binance Pakistan, to explain his position on the company’s linkage to “fraudulent online investment mobile applications,” an FIA Cyber Wing (Sindh) press release said.
The inquiry was launched to investigate a series of online investment scams taking place in Pakistan under the pretext of Ponzi schemes, in which naive investors are promised large returns on their money if they bring in additional clients, according to the agency.
“A relevant questionnaire has also been sent to [the] Binance Headquarters [in] the Cayman Islands and Binance US to explain the same,” it said.
According to the company, Binance is the “biggest unregulated virtual currency exchange” in the world, with Pakistanis spending millions of dollars. The agency received multiple complaints from citizens around the country on December 20 last year, alleging that they had lost billions of rupees while using specific mobile applications.
According to the FIA, these apps convinced consumers to sign up for Binance Crypto Exchange (Binance Holdings Limited) and then move money from their Binance Wallet to the app’s account. At the same time, all members of the group were joined to Telegram groups where the anonymous owner of the program and moderators of the Telegram groups provided professional betting indications on the rise and fall of Bitcoin.
Once a substantial capital foundation had been formed, these applications failed, depriving users of millions of dollars through the “referral bonus mechanism.” According to the FIA’s preliminary results, each app had an average of 5,000 subscribers, with the HFC app boasting the highest client base of 30,000.
The agency has contacted Telegram to request information on the location of the administrators of fake applications.
“Legal letters are also being sent to social media influencers pushing these applications to clarify their point of contact with the apps,” according to the press release.
Binance – Industry
A cryptocurrency exchange, also known as digital currency exchange (DCE), is a company that lets consumers swap cryptocurrencies or digital currencies for other assets like fiat money or other digital currencies. Credit card payments, wire transfers, and other modes of payment may be accepted through exchanges in exchange for digital currencies or cryptocurrencies.
A cryptocurrency exchange may either be a market maker that charges a transaction commission based on the bid-ask spreads or a matching platform that simply collects costs.
COVID-19 has had an unprecedented and astounding worldwide impact, with cryptocurrencies experiencing a positive demand shock across all areas as a result of the epidemic. According to the research, the worldwide market will rise by 10% in 2020, compared to a 5% year-on-year increase from 2017 to 2019.
During the period 2021-2028, the market is expected to increase at a CAGR of 11.1 percent, from USD 910.3 million in 2021 to USD 1,902.5 million in 2028. This market’s demand and growth are responsible for the continuous increase in CAGR, which will revert to pre-pandemic levels after the pandemic is ended.
Binance – Name, Logo, and Tagline
The designers intended to use two squares in the company logo to reflect the bids and requests on the exchange while also repeating the “binary” term in the logo (Binance = Binary Finance).
Binance Logo
The term “Binance” comes from the words “bitcoin” and “financial.”
Binance’s company tagline says, “Revolutionary Trading With Half the Fees & Your Dividends Paid.”
Binance – Founders
Changpeng Zhao founded Binance crypto-exchange in 2017.
Founder of Binance – Changpeng Zhao
Chanpeng Zhao
Changpeng Zhao is a Chinese-Canadian business executive who goes by the moniker “CZ.” Zhao is the founder and CEO of Binance, which, as of April 2018, was the world’s largest cryptocurrency exchange by trading volume. Zhao was a part of the Blockchain.info development team and also served as the chief technical officer of OKCoin.
Zhao founded Binance, a cryptocurrency exchange, in 2017, after leaving OKCoin. After obtaining $15 million in an initial coin offering, the firm was launched in July 2017.
As of April 2018, Zhao had grown Binance into the world’s largest cryptocurrency exchange by trading volume in less than eight months. He was ranked third on Forbes Magazine’s list of “The Richest People in Cryptocurrency” in February 2018. His net worth is expected to be $96 billion in 2022.
Forbes Richest People in Cryptocurrency
Binance – Startup Story
Zhao’s life would be forever changed by a single night in August of 2013. He was playing poker in Shanghai with two of his pals, Bobby Lee, the creator of the BTCC Bitcoin exchange, and Ron Cao, a partner at Lightspeed Ventures at the time. Cao continued saying something that sounded like “Bit Coin,” but pronounced it as two syllables. It was Zhao’s first time hearing about it.
He overheard Cao suggesting that he should launch a startup on Bit Coin or blockchain. Then Lee suggested that he should invest 10% of his net worth in it. If it reaches zero, he would lose 10% of his investment. There was a good probability that it would go 10X and he would double his money.
His pals weren’t kidding when they said the same. Zhao was enthralled. He eventually raised him: a few months later, he sold his house for $1 million and placed everything on Bitcoin. BTC was trading for $600 per coin at the time. Despite Bitcoin’s price plunging as low as $200 at times, Zhao told Decrypt he hasn’t touched it. The value of the savings account has risen to $17 million.
The man has never shied away from taking chances since then. Changpeng Zhao, a developer who had previously designed high-frequency trading software, launched Binance. Binance was founded in China but moved its headquarters out of the country after the Chinese government tightened its grip on cryptocurrencies.
Fusion Solutions, founded by CEO Changpeng Zhao in Shanghai in 2005, specializes in high-frequency trading systems for stockbrokers. In 2013, he became the third member of the team at Blockchain.info, a bitcoin wallet. He also spent less than a year as the CTO of OKCoin, a platform for spot trading between fiat and digital assets.
With a market value of $1.3 billion in January 2018, Binance was the largest cryptocurrency exchange, a record it maintained until April 2021, despite competition from Coinbase and others.
Binance has introduced two cryptocurrencies that it built itself throughout its history: Binance Coin (BNB) in June 2017 and Binance Smart Chain (BSC) in September 2020.
Binance’s vision statement says, “Our vision is to increase the freedom of money globally. We believe that by spreading this freedom, we can significantly improve lives around the world”
Binance’s mission statement says, “Our mission is to be the infrastructure services provider for the blockchain ecosystem.”
Binance – Employees
Changpeng Zhao – CEO & Founder
Teck Chia – Partner
Yi He – Co-founder and CMO
Jarred Winn – Senior Vice President
Gleb Kostarev – CIS and Eastern Europe, Russia
David An – Director BD | NFT
Mai Lu – Vice President of Asia Pacific
Binance – Business Model, and Revenue Model
Trading fees, interest on loans, fees from its broker program, spreads, cloud products, interchange fees, mining services, and investment earnings are all sources of revenue for Binance. The site used to make money by charging listing fees when new cryptocurrencies were launched.
Binance is also distinguished from other exchanges by the large number of trading choices it provides. Stop limit or market orders, leverage trading, and peer-to-peer trading are some examples. Users can also contribute their current crypto assets to one of Binance’s organizations. The platform does not take a cut, and all revenues are donated to the user’s preferred charity.
Binance does not provide free cryptocurrency trading. Binance charges a range of fees for the various trading items it provides. On Binance, both retail and institutional investors can trade in a variety of ways, including on margin, through future contracts, and by acquiring synthetic stock tokens.
When it comes to cryptocurrencies, Binance charges a fee every time a customer buys or sells a digital asset. Binance charges a 0.1 percent commission on all trades. Those costs will be reduced if traders utilize BNB, Binance’s currency. In addition, when a trader wishes to cash out his or her profits, Binance imposes a withdrawal fee.
Binance has raised a total of $35 million in ten rounds of fundraising.
Date
Round
Amount
Lead Investors
Dec 1, 2020
Initial Coin Offering
–
–
Oct 23, 2018
Venture Round
–
Vertex Ventures
Nov 1, 2017
Initial Coin Offering
–
–
Nov 1, 2017
Initial Coin Offering
–
–
Sep 1, 2017
Series A
$10M
–
Sep 1, 2017
Series A
$10M
Black Hole Capital, Funcity Capital
Jul 21, 2017
Initial Coin Offering
–
–
Jul 1, 2017
Initial Coin Offering
$15M
–
Jul 1, 2017
Initial Coin Offering
–
–
Jan 1, 2017
Initial Coin Offering
–
–
Binance – Investments
Binance has invested in 56 different companies.
Date
Organization Name
Round
Amount
Nov 23, 2021
Avocado Guild
Series A
$18M
Nov 4, 2021
Mythical Games
Series C
$150M
Nov 2, 2021
SecondLive
Seed Round
–
Nov 1, 2021
StarSharks
Seed Round
–
Oct 22, 2021
Melos Studio
Venture Round
–
Sep 16, 2021
LayerZero Labs
Series A
$6.3M
Apr 13, 2021
MOUND
Seed Round
$1.6M
Apr 1, 2021
Mask Network
Venture Round
–
Mar 30, 2021
PureStake
Series A
$6M
Mar 29, 2021
EPNS
Seed Round
$660K
Binance – Acquisitions
Binance has acquired seven businesses.
Acquiree Name
About Acquiree
Date
Amount
Swipe.io
Swipe.io offers a multi-currency crypto wallet app as well as a crypto-to-fiat funded Visa debit card.
Jun 30, 2020
–
CoinMarketCap
CoinMarketCap provides transparent data to the cryptocurrency community, enabling users to form conclusions and interpretations.
Apr 1, 2020
$400M
BxB
BxB is building KRWb, a stable bridge from Korea to anywhere. It’s a globally accessible, 1:1 stable coin backed by the Korean Won.
Mar 31, 2020
–
DappReview
DappReview is a DApp ranking evaluation platform
Dec 3, 2019
–
WazirX
India’s leading bitcoin exchange
Nov 21, 2019
–
JEX Customer Care Number
JEX is a crypto futures and options exchange.
Sep 3, 2019
–
Trust Wallet
Trust Wallet is a mobile wallet company for Ethereum and ERC20/ERC223 tokens.
Jul 31, 2018
–
Binance – Growth
In 2020, already-vulnerable economies and countries witnessed unprecedented volatility and instability in global markets. With global economic uncertainty, inflation, and traditional assets all suffering as a result of the pandemic’s macroeconomic shock, individuals all around the world are rapidly turning to bitcoin and cryptocurrency as alternative assets. As a result, the cryptocurrency industry has exploded, allowing mainstream audiences to embrace cryptocurrency adoption for the first time.
Binance, a crypto version of the London, New York, and Hong Kong stock markets, was founded just four years ago and already towers over the digital currency industry. According to data source CryptoCompare, Binance conducts more deals for cryptocurrencies like bitcoin and ether each day, totalling $76 billion, than its four top competitors combined.
Binance, a prominent cryptocurrency exchange, has been chased by financial regulators all around the globe. Some have prohibited the site from engaging in specific operations, while others have alerted users that it is operating without a license. Because Binance does not provide financial information, it’s difficult to assess whether the company has suffered a setback.
Despite the regulatory pressure, the exchange has taken several important movements. Zhao, the CEO of Binance, stated that he wanted to repair his relationship with authorities. Their consent would be sought, and regional headquarters would be established.
Binance has also scaled back certain of its cryptocurrency goods that may be subject to regulatory oversight. It announced in 2021 that it will cease its European futures and derivatives business, with users in Germany, Italy, and the Netherlands among the first to be affected.
It has also limited Hong Kong customers’ ability to trade derivatives, citing the decision as “in keeping with our commitment to compliance.” Binance likewise ceased trading digital tokens connected to stocks in July 2021 after authorities slammed its “stock token.” It also announced that it will no longer allow crypto margin trading in the Australian dollar, euro, or pound sterling.
Binance hit an all-time high of $15 billion in 24-hour spot trading volume in 2021, while the average daily spot trading volume climbed by 36% to $3.88 billion. In addition, consumers looking for hedging and liquidity went to the crypto futures market. Binance Futures has risen to become the world’s leading crypto futures contract, with the highest trading volumes for Bitcoin and numerous other cryptocurrencies.
The company’s objective is to continue complying with local norms and regulations so that it can safeguard and give the finest services to its consumers while also increasing adoption.
In addition to the numerous RegTech solutions it invests in and compliance partner organizations with whom it collaborates, the company continues to collaborate closely with regulators, complying in the places where it operates as a global decentralized organization and assisting in the positive influence of regulations that will benefit our industry. According to the creator, the firm aims to collaborate with more local governments and officials in the coming years and encourages them to do so.
Binance – FAQs
Is Binance bigger than Coinbase?
Yes, Binance is the largest cryptocurrency exchange by volume.
How much does Binance make in a day?
Binance makes approximately $76 Billion a Day.
Which countries cannot use Binance?
The people in the UK cannot use Binance, as the crypto exchange is banned in the country.
Some people find such a predicament in order to trade their cryptocurrency into various cryptocurrencies such as Bitcoin, Litecoin, NEO, Cardona etc. So, here a cryptocurrency exchange company Binance established a smooth and reliable platform that aids in trading a cryptocurrency into various cryptocurrencies.
Binance was founded by a Chinese-Canadian business executive Changpeng Zhao in 2017. The main purpose of building Binance is to enhance high-frequency trading software. The company holds more than 500 cryptocurrencies trading software and virtual tokens for instance- Ether, Dogecoin, Cardona, Litecoin etc.
Moreover, Binance tolerates exchanging its own Blockchain-based cryptocurrency Binance Coin BNB. Binance provides various services to its users like helping out in making investment decisions, transfer of electronic funds and eligibility to earn interest.
As of now, Binance is currently functioning in more than 180 countries except the United States of America, Italy and the United Kingdom. In the past two years, Binance has been struggling with multiple warnings from various governments regarding its spurious and counterfeit activities in the name of global trading of cryptocurrency.
Financial Conduct Authority banned the world’s biggest crypto exchange company Binance from conducting illegal ‘regulatory activity’ in U.K. as the company didn’t register with the FCA in order to operate their services in the country.
Binance helps in trading, listing, de-listing, fundraising and withdrawal of international cryptocurrencies. Besides, the company also provides services in exchanging its own cryptocurrencies with enormous benefits through initial coin offerings.
Binance allows the trading process with the support of these seven types of trade orders- Limit Order, Market, Trailing stop order, LLimit TP/SL Order (Strategy Order), Stop market order and Stop-limit orders. People can exchange their cryptocurrencies with these trade orders.
Other than the exchange of cryptocurrencies, Binance also generates users to earn interest by funding Stablecoins in the market for an exchange. Besides, interest is estimated on the coin’s tenure, value in the market, interest rates available on such coins.
Binance bestows Visa Card which is a credit card that accesses users to convert their cryptocurrency into fiat current and can spend that liquidity money on products.
Target Audience of Binance
Binance highly targets those investors who are ready to fund a hefty amount of cryptocurrency in the market for the exchange of high-frequency cryptocurrency.
Binance, being the largest and most famous cryptocurrency exchange in the world with its own two forms of cryptocurrencies, has a business model that makes the company a highly profitable enterprise.
The company earns its profit by trading fees, fees from its broker program, interest on loans, stock token spreads, mining services, interchange fees, cloud offerings and profits from investment.
One major source of income for Binance is by charging brokerage fees in Binance Coins (BNB) for every transaction that takes place on the exchanging platform. It also makes capital gains on the coin investments and thus makes the BNB coin price rise.
What is unique about the Business model of Binance
Binance charges a fee for trading cryptocurrency. When a user buys or sells a cryptocurrency, generally Binance charges a 0.1 per cent fee for the trade. But the charge can differ according to the currency and type of exchange.
Investing
In 2018, Binance began investing in other cryptocurrencies and it also distributed ledger technology projects. The company can earn when the investments are sold at a profit and the incoming dividends also serve as a source of income.
Mining Services
In 2020, Binance introduced two mining pools for mining bitcoin and Ethereum. Bitcoin users are charged 2.5 per cent and Ethereum users are charged 0.5 per cent pool fees by Binance.
Spreads
Users of Binance can buy stock tokens from April 2021. Stock tokens are similar to real stock and the value of the underlying shares determine the value of the token. Binance earns through spread from the difference between the buying and selling price even though a fee isn’t charged for buying and selling of tokens.
Interchange Fees
In July 2020, Binance in partnership with Visa launched a Visa debit card. Users need to transfer funds from their cryptocurrency wallet to the spot wallet. Binance charges an Interchange fee when the debit card is used for making a purchase. The fee is paid by the merchant and is less than 1 per cent. Binance also charges a fee for ATM withdrawals and payments up to 0.9 per cent.
Interest On Loans
Binance allows its users to take cryptocurrency loans for a period of 7-180 days by pledging their crypto holdings as collateral. Binance earns by way of Interest on these loans and the interest is calculated based on the amount taken as loan, the time period and the collateral.
Cloud Offerings
Binance Cloud platform allows users to launch digital asset exchanges using their software-as-a-service capabilities. Binance offers other services apart from spot trading like peer-to-peer fiat exchange, etc. Binance charges an annual fee on their cloud products and splits the trading commission with the investors.
Cryptocurrencies are gaining popularity in the present and have become a popular form of investment among many due to their changing value and the transactions being secure while paying using cryptocurrencies online are some of the many factors for the popularity of cryptocurrencies.
Changpeng Zhao has utilised his existing knowledge of cryptocurrency and has made Binance a major player in the cryptocurrency exchange platforms with its unique features and effortless trading.
FAQ
What is Binance?
Binance is the largest online cryptocurrency exchange trading platform founded in 2017. The company was initially based in China and is currently headquartered in Malta due to the increasing regulation of cryptocurrency in China.
Who is the founder and owner of the Binance?
The cryptocurrency exchange platform Binance was founded by Changpeng Zhao in 2017. Previously, he had founded a company in Shanghai that built a high-frequency trading system for stockbrokers, Fusion Systems in 2005.
How much profit has Binance made as of 2020?
Binance is expected earn profit of $800 million to $1 billion in 2020. In 2019, Binance earned a profit of $570 million.
The cryptocurrency exchanges have been growing for a very long time with a huge set of believers towards the digital coins. At the same time, there has been a lot of crashes, a lot of wealth wiped off, and as well as a lot of wealth gained through it.
However, many countries across the globe have been laying restrictions over the trading of cryptocurrencies and the most recently even the UK has banned the largest cryptocurrency of the world from undertaking transactions related to cryptocurrency. In this article let’s look at the reason for it.
The Financial Regulator of Britain has ordered Binance which is one of the largest cryptocurrency exchanges around the globe, to stop all the regulated activities conducted by the crypto exchange. The Financial Regulator has also issued a warning for the consumers about the platform which is coming under critical observation globally.
In a notice that was sent on 25 June 2021, the Financial Conduct Authority of the UK has conveyed to the UK entity of Binance, Binance Market Limited that the exchange should not carry out any regulated activities without the prior written consent from the FCA.
Terms stated by FCA to Binance
The trading of cryptocurrencies is not directly restricted in the United Kingdom but offering services such as trading in the derivatives of cryptocurrencies does require the authorization.
The FCA has asked Binance to display a notice on its website and social media channels by 30 June 2021 stating that “BINANCE MARKET LIMITED IS NOT PERMITTED TO UNDERTAKE ANY REGULATED ACTIVITY IN THE UK”.
Other than this the FCA has asked Binance to secure and preserve all the records relating to the UK consumers and to provide the information to the FCA by 2 July 2021.
Reason Why UK imposed a ban on Cryptocurrency exchange – Binance
The regulator has not provided any information or has provided an explanation for why it had taken the measure against Binance. However, Binance had stated earlier that it takes its legal obligations very seriously and engages with the law enforcement and regulators in a collaborative manner.
Some of the reasons can be the problems faced by Binance across the globe. The regulator of Japan has conveyed on 25 June 2021 that Binance had been operating in the country illegally. This was found through a notice that was posted on the country’s Financial Services Agency Website.
In the month of May officials from the US Justice Department and Internal Revenue Service who investigate tax offenses and money laundering had sought various information from individuals regarding insights into the business of Binance.
In the month of April, the financial regulator of Germany, BaFin had warned the exchange about the risks of being fined for offering Digital tokens without a prospectus of the investor.
These can be the reasons why the UK had decided to ban the cryptocurrency exchange in the country. Amidst the growing number of acquisitions and cases against the Crypto exchange, the UK regulator would have taken the move.
Will UK ban other cryptocurrency exchanges?
Since the month of January 2021, the FCA has asked all the different Cryptocurrency exchanges and the apps that offer crypto related services to register and to provide details that they comply with the rules of anti money laundering. However, in the month of June, the FCA has conveyed that only 5 firms have registered and that the majority of the firms were not compliant.
The FCA is stepping up its unintentional failure to notice the cryptocurrency trading, which has grown in popularity in the UK along with various other countries across the globe.
This may be a major step towards hunting down the firms that are not compliant with the anti money laundering rules in the country. Binance may be the first step that is taken by the regulator. However, the countries across the globe have been hunting down the crypto exchanges and various transactions of the cryptocurrencies.
FAQ
Is Binance banned in UK?
Yes, The UK financial watchdog has banned leading cryptocurrency exchange Binance from all regulated activities.
Why is Binance being banned?
Binance has not registered with the FCA and therefore is not allowed to operate an exchange in the UK.
Will UK ban Crypto exchanges?
The U.K. does not regulate cryptocurrencies, but it requires exchanges to be registered to operate, which means companies must comply with anti-money laundering measures.
The Enforcement Directorate has announced that it has sent a notice towards the largest cryptocurrency exchange of India, WazirX and its directors regarding a money laundering investigation. Let’s look at the information regarding the money laundering case and the amount involved.
On 11 June 2021, the Enforcement Directorate had issued a show cause notice to the largest cryptocurrency exchange in India, WazirX. The notice provided is for going against the law of FEMA 1999 (Foreign Exchange Management Act). The cryptocurrency exchange has been said to be involved in the transactions involving cryptocurrencies which are estimated to be a worth of INR 2,790.74 crores.
The Enforcement Directorate had mentioned in a statement that it had initiated the statement regarding FEMA due to the ongoing investigation regarding the investigation of money laundering which involves various betting online applications that are owned by the Chinese.
Names mentioned in the notice issued to WazirX by ED
WazirX is a cryptocurrency platform that is registered under the company name Zanmai Labs Pvt Ltd. The company was registered in the year 2017 in the month of December as a domestic cryptocurrency startup.
After the completion of the investigation, the central probe agency had issued a notice in which the name of the company and the name of the directors Hanuman Mhatre and Nischal Shetty have been mentioned. The global cryptocurrency exchange Binance had acquired WazirX in the year 2019.
WazirX Trading volume Growth
The Allegations on WazirX
During the duration of the investigation, it was found that the Chinese nationals who were accused of the money laundering case had laundered the proceeds of the crime which is said to have a worth of INR 57 crores.
The laundering of the amount is said to be converted into cryptocurrencies from the Indian National Rupee. The amount was exchanged to the Tether cryptocurrency and was then transferred to the wallets on the Binance Exchange that is registered in the Cayman Islands.
The wallet transaction was expected to be based on the instructions that were received from abroad. The Enforcement Directorate also alleged that the cryptocurrency exchange WazirX also allows a wide range of transactions with cryptocurrencies which include the transactions to the exchanges or INR and vice-versa, peer to peer transactions, exchange of cryptocurrencies and even the transaction of cryptocurrencies that are held in its pool accounts to various other exchanges.
The wallets can be held by anyone who can be foreigners in foreign locations.
What did ED found through Investigation upon WazirX
The ED had alleged that WazirX does not collect any required documents which is a proper violation of the basic mandatory Anti-money laundering (AML). They also added that it was against the Combating finance of terrorism (CFT) norms and also FEMA guidelines.
During the investigation, it was found that WazirX had received cryptocurrencies through its pool account from Binance exchange which had a value of around INR 880 crores and it was also found that there was a transfer of cryptocurrencies from WazirX to Binance exchange which had a value of around INR 1,400 crores. However, these transactions were not recorded on any blockchain and could not be audited or investigated.
The investigation also found that the cryptocurrency exchange WazirX could also transfer cryptocurrencies to people from any location or any nationality even without proper documents which makes it a safe haven for people who are involved in illegal businesses and money laundering. It makes itself a crypto exchange supporting illegitimate activities.
WazirX founder stated on Twitter they didn’t receive any show-cause notice till now from the Enforcement Directorate and they comply with all applicable laws.
1/3
WazirX is yet to receive any show cause notice from the Enforcement Directorate as mentioned in today's media reports.
WazirX is in compliance with all applicable laws.
— Nischal (WazirX) ⚡️ (@NischalShetty) June 11, 2021
Conclusion
WazirX one of the largest cryptocurrency exchange has been alleged for promoting illegal and illegitimate activities through their exchange and even the parent company of WazirX, Binance exchange has also the involvement in the case. The Indian Government has conveyed that they were open to exploring the new technologies like cryptocurrencies for improving their governance.
FAQ
Why did ED issue notice to WazirX?
ED has issued a notice to WazirX, and its Directors Nischal Shetty and Sameer Hanuman Mhatre for alleged violation of the Foreign Exchange Management.
Is WazirX owned by Binance?
Yes, WazirX is owned by Binance and is often acknowledged as the world’s largest cryptocurrency exchange by trading volume.
Who is the CEO of WazirX?
Nischal Shetty is the CEO and Founder of WazirX who founded WazirX on march 2018.
Sarika Anand
