Binance’s Regulatory Challenges
• Binance has been facing regulatory challenges in the US due to fears of potential prosecution.
• In 2018 and 2019, Binance approached Gary Gensler, current SEC chairman, to become an advisor for the firm.
• Gensler declined the offer but was generous in providing license strategies to Binance executives.
Binance’s Efforts to Woo SEC Chairman
In 2018 and 2019, Binance sought to establish a relationship with US Securities and Exchange Commission (SEC) chairman Gary Gensler. At the time, Gensler was teaching at the Massachusetts Institute of Technology (MIT) and had previously worked as chairman of the Commodity Futures Trading Commission (CFTC). Harry Zhou, then head of Binance’s venture capital division Ella Zhang, met with Gensler in October 2018. The two discussed license strategies for cryptocurrency exchanges operating in the US. In March 2019, Changpeng Zhao had a video call with Gensler where he was interviewed for a course on cryptocurrency that Gensler would be teaching that summer at MIT.
Regulatory Crackdown Intensifies
The US crypto crackdown has been intensifying recently with actions taken against Kraken over its crypto staking service as well as USD-backed stablecoin issuer Paxos over claims it issued an unlicensed security. Meanwhile, staff at the agency are reportedly suspecting that Binance’s US subsidiary might be operating without necessary registration as a securities exchange. Any enforcement action against Binance would require approval from majority of SEC commissioners including Chairperson Gary Gensler who has stated his opinion that most trading platforms should register as securities exchanges if they want to operate in the country legally.
Binance – The Dominant Exchange
Binance is currently one of the largest cryptocurrency exchanges worldwide with more than 15 million customers using their platform globally and processing nearly $3 billion worth of trades daily. It also ranks among top 5 global exchanges when it comes to Bitcoin trading volume making it one of most influential players on the market.
Conclusion
As cryptocurrencies gain more mainstream adoption, companies like Binance will need to meet higher regulatory standards if they want to continue operating within certain jurisdictions such as in United States according to regulations set by agencies like SEC or CFTC . While efforts were made by Binance executives in past years to reach an understanding with regulators like Gary Gensler current chairperson at SEC it remains uncertain how will this affect company’s operations going forward given recent changes in regulator’s stance towards crypto related activities .