Here’s what would happen if Binance loses the compliance race for DailyCoin

Here’s what would happen if Binance loses the compliance race for DailyCoin

Here’s what would happen if Binance loses the compliance race for DailyCoin

Here’s what would happen if Binance loses the compliance race

  • Regulators around the world are considering the Binance exchange despite its rise in regulatory standards.
  • The lack of regulation in the cryptocurrency space creates controversy between exchanges from different jurisdictions.
  • Regulators’ crackdown on exchanges hampers existing platform users despite the lack of a legal framework.
  • Gemini, Kraken, and other crypto exchanges are looking to deliver to challenge Binance’s supremacy.

Binance is being monitored after regulators continue to uncover irregularities in its business practices. Furthermore, cryptocurrencies are a new asset class and a legal framework has yet to be fully installed. Each country is crafting its own stance on digital assets, making exchange compliance a difficult model to achieve. Interaction with speculative assets is therefore risky from more than one point of view, as interaction with the market is not fully defended.

Binance can’t find the way to go

Binance is the largest cryptocurrency exchange by daily trading volume with active trades of $ 14 billion. In contrast, exchanges like Gemini amount to just $ 117.7 million; However, according to Bloomberg, Cameron Winklevoss said, companies like Gemini are trying to win the “long game” of compliance.

Increased regulatory action in countries such as Japan, Thailand, the Cayman Islands, and the United Kingdom led Binance to increase its regulatory compliance team. While such action is a sign of crypto maturity and mainstream appearance, CZ, the owner of Binance, ridiculed “regulators” in a tweet.

Still, Binance has reaffirmed its status of inclination towards higher compliance standards. Despite their attempts, payment solutions provider Clear Junction did the same with Barclays (LON 🙂 and Santander (MC 🙂 Bank in the UK will stop processing payments for Binance after the UK Financial Conduct Authority concluded that Binance does not engage in any regulated activity.

The regulatory landscape is difficult for cryptocurrencies to navigate. Despite leaning toward government standards to increase its compliance standards, scrutiny of the exchange is skewed. Binance launched several compliance plans, some of which are currently being implemented, such as the Binance academy or “doubling down on their regulatory compliance team.”

What if Binance doesn’t lead the pack …

The Binance effect “when Binance” ruled in 2018 was similar to the current Coinbase effect. BitGo’s Horowitz, argued that competition is sidelined when adding value to the entire industry. However, as the Gemini CEO argued, crypto exchanges are in a “race” to ensure that only one becomes the standard once full compliance is achieved.

The FATF, an AML watchdog, is reviewing the current crypto landscape; However, the emergence of DeFi further blurred the lines in the market. Binance is a centralized institution and is subject to a strict regulatory framework. The exchange is under pressure for regulators because it represents the staple of crypto transactions. Any overall result for Binance will set a precedent for other crypto exchanges.

On the other side

  • UK users can still access and deposit on Binance using other methods that comply with FCA standards.
  • Binance is the equivalent of Coinbase, which has been discarded by its Chinese association.
  • The race for compliance means that exchanges wait for the most prominent exchanges to lose ground to capitalize on the market.

What about the future?

The legal incorporation of Binance has been debated as there is no headquarters. According to a WSJ article, Binance users were locked out of their accounts during the Bitcoin dump, leaving them unable to exit their positions. The Verge argues, “Binance can screw up its users” to no avail because they are not regulated.

Such activities have happened with regulated and compatible exchanges. Kraken has obtained its banking charter status in Wyoming, and other exchanges are pushing for a fairer game by establishing the Virtual Products Association. Still, the current action of the US exchanges seems to be a way to clean up your record of your past actions.

Whether Binance will collapse and exist, the game is a long-term question. Compliance implies anonymity and privacy will no longer exist, and cryptocurrency merchants and users will be subject to the same AML rules as banks. Additionally, Binance users will be vetted based on their location, which means that the crypto field of play will seek to focus within the US.

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