- China is now much more serious than it was in 2017 and other previous years on its cryptocurrency ban, Binance’s CZ believes.
- He also revealed that Binance is committed to becoming regulatory compliant and that he has been having positive sitdowns with regulators globally.
China is not playing around this year with its cryptocurrency ban, Binance CEO believes. In an interview, Changpeng Zhao revealed that any attempts to serve Chinese users are being blocked, including sending of one-time pins (OTPs) and email verification. However, CZ is committed to ensuring Binance becomes regulatory compliant at a time when it has faced mounting scrutiny.
As CNF reported recently, Binance published a Bill of Rights, advocating for universal access to financial tools, including cryptocurrencies, for economic independence. It also outlined the responsibilities that cryptocurrency platforms owe to their users, including accurate ads and high liquidity.
In a follow-up interview with Fortune, CZ revealed that the Bill of Rights was a culmination of its communication with many regulators globally.
“We want to put this out there so everybody understands from our position what’s important. […] We have a much more detailed framework that we share with regulators directly,” he said.
The Bill of Rights is also yet another step towards becoming more compliant with global and local regulations, the former Coinbase engineer added. Binance has been under intense crackdown from regulators in a couple of dozen jurisdictions in recent months.
In some countries, it has been because of its lax verification methods that allow criminals to use its platform to launder money and scam victims. In other countries, its stock tokens representing shares in companies like Tesla and Coinbase have landed it in trouble with watchdogs, such as Germany’s BaFin.
Binance is working to change this reputation as a crime haven, and CZ pledged to soldier on with some recent initiatives.
…we have chosen to go with full compliance, full mandatory KYC for global users, for every feature. We feel that being compliant will allow more users to use us. Most people do feel more comfortable using a licensed exchange.
There are those clients that would prefer to use Binance in its former layout, with little KYC. However, the CEO believes that the majority are on board with new measures, saying the exchange is only losing 3 percent of its users.
CZ: China is not playing around this time
Binance was founded in China in mid-2017, and Chinese users played a big part in making it the global behemoth that it now is. However, since 2017, China has been stamping out the cryptocurrency industry, completing the purge by chasing off all BTC miners this year.
And while some experts have dismissed this as just another ban with little effect, CZ believes this year China is much more stringent.
I don’t think there’s anything to be done in China right now from a blockchain industry perspective. The actual restrictions, the actual block is much stronger this time than in 2017.
In 2017, the Chinese firewall blocked Binance.com. However, this year, China has blocked even SMS messages to Chinese numbers which are critical in two-factor authentication (2FA). Email verification has also proven to be impossible for Chinese users, CZ revealed.
There’s really not an easy way, the blocks are very complete, very effective. So I don’t see any way that China users can continue to use crypto platforms like us in any reasonable fashion. I also don’t see the policies changing in the short term.