Why It’s Time to Get Tough on Crypto Regulation
Make no mistake: crypto needs regulation. Here’s why industry leaders must step up and work alongside policymakers and regulators to build the blockchain-powered financial ecosystem of the future.
Dear Binancians, Blockchain has officially entered the big leagues. With the markets ticking past the $2 trillion dollar mark, today’s blockchain and crypto industry has produced some of the world’s most innovative and dynamic markets, filled with opportunities both financial and otherwise. Bitcoin and other popular cryptocurrencies are now household names, while digital asset exchanges where users can buy and sell crypto have become some of the most popular apps in the finance category.
The outlook for the industry has never been better—even as the industry is faced with critical new challenges, in the form of fresh regulatory frameworks and legal provisions to adhere to. Indeed, the next generation of blockchain and crypto firms must cooperate with regulators and policymakers to shape the future of the crypto industry, and pave the way forward for the next billion users.
According to the Global Crypto Index report commissioned by Binance.com, our global blockchain company and ecosystem provider, in Q3 2020, the total number of crypto users in the world increased to 101 million, marking a twenty-fold increase in less than four years. Since then, that number has doubled according to some estimates. At the same time, major cryptocurrencies like Bitcoin have shown a remarkable degree of resiliency, maintaining value through multiple bull and bear market cycles. For the first time, major global brands are entering the market, through sectors like crypto services, NFTs (non-fungible tokens), GameFi (a combination of gaming and decentralized finance) and more.
As the industry matures, participants must rise to the occasion and offer compliant products and services that meet diverse regulatory requirements around the world. Like many disruptive industries before it, crypto is no exception when it comes to regulatory scrutiny. In fact, I believe that it’s critical for industry players to collaborate openly with regulators, in order to build trust and better protect users.
Regulatory clarity provides a set of clear operating standards that responsible companies can benefit from. At the end of the day, we owe it to users to continually find new ways to protect their interests. A firm set of rules and standards helps create a fairer market for all participants, which will–in turn–incentivize participation and accelerate the adoption of cryptocurrencies.
At Binance, we’ve launched a series of initiatives to ensure our operations comply with as many applicable regulatory requirements as possible—and we want to set the standard when it comes to compliance. As the world's leading blockchain company and ecosystem provider, we want to facilitate mainstream adoption and provide as many people as possible with secure and compliant access to crypto.
We’ve also continued to uphold our commitment to self-regulation, proactively restricting derivatives product offerings in Hong Kong, and ending our derivatives and futures offerings in several markets, including Germany, Italy and the Netherlands. Simultaneously, we’ve announced new compliance measures, including the suspension of margin trading for three major local currencies: the Euro (EUR), British pound (GBP) and the Australian dollar (AUD).
In addition, we’ve enhanced our due diligence policies when it comes to KYC (Know-Your-Customer) and AML (Anti-Money Laundering) mechanisms, introducing mandatory Intermediate Verification to help ensure that we can provide a safe crypto environment for everyone and enhance user protection. Finally, this year alone, we’ve grown our international compliance team by 500%, as part of our ongoing efforts to offer fully compliant and licensed services in all regions where we operate.
Blockchain technology belongs to everyone. Though the stakes have never been higher, crypto regulations present a clear path forward for a safer and more compliant industry. In order for the blockchain and crypto industry to reach broader audiences, participants must work together with policymakers and regulators to develop a clear regulatory framework that will spark the next phase of growth.
Binance CEO & Founder