Regulations are important, and Binance embraces them with open arms

Ago 19, 2021

Home 9 Cryptonews 9 Regulations are important, and Binance embraces them with open arms

Satoshi Nakamoto presented his whitepaper on Bitcoin a little over twelve years ago. In this whitepaper was the birth of a technological and financial revolution so disruptive that today tech geeks, retail investors, financial giants across economies, and governments have had to step up and take active participation in it.

Cryptocurrency markets are still nascent in terms of time and yet the explosive growth that has seen these digital assets reach a market capitalization of close to $1.9 trillion has everyone stop and take serious notice. Traditional financial institutions, even governments are realizing the power of these new digital assets and are actively participating in this revolution.

Traditional stock exchanges have been around for years

A big reason for the astronomical rise of the prevalence of cryptocurrencies in financial markets must be attributed to the exchanges that facilitate investors and traders to deal in cryptocurrencies.

Traditional stock and securities markets themselves are run through the agency of exchanges like NYSE or LSE, which have been around for many years now. Due to the maturity that traditional markets have gained by virtue of lengthy existence, these markets are highly regulated and are usually under the purview of a governmental commission or board.

These exchanges handle billions of dollars worth of transactions every day – a capacity that was slowly developed over the years; and in that time frame, entire financial systems around the world have gone through many regulatory and operational changes.

Binance grew with the crypto markets

For cryptocurrency markets, however, things are definitely different. As we understand, this market is not nearly as mature as the traditional market, the volatility is much more intense, and exchanges saw an unbelievable increase in the number and value of transactions in the past couple of years.

Binance, one of the world’s largest and most reputed cryptocurrency exchanges, earned its position as a leader in the industry in a matter of four years. Out of the total market cap of close to $2 trillion, more than $20 billion worth of trading happens on Binance. BNB, the platform token of Binance is now the fifth most valuable cryptocurrency and has increased in price from just above $8 per coin in early 2018 to close to $350 currently, with an ATH of $675. This translates to a more than an 80x increase in price. This scale of increase in the volume of business is unforeseen and unheard of in traditional financial markets, and naturally, there are certain issues that pop up in such a situation.

Binance understands its role

Governments and financial regulators have been slow in realizing the scope of activities and the scale of the crypto markets. Naturally, they struggled to catch up, and in that effort, they tried to suspend operations of exchanges, notably Binance, citing regulatory frameworks. The recent crackdown of the US Justice Department and the Internal Revenue Service (IRS) on Binance Holdings is an example of this.

However, Binance, as a responsible business and as a leader in the industry, understands its duty towards its users and holds itself to the highest standards, even if the regulations of a country may not require it. Binance also agrees with imposing clearer regulations by countries because it believes that a sound regulatory framework is a sign of maturity; something which is long overdue for crypto markets.

Assuring Binance and CFT association

As these frameworks evolve, Binance as an abiding and responsible business will continue to comply with the requirements. The CEO of Binance, CZ, says that compliance is a journey and increasing participation and complexity of crypto markets is a result of growth.

As highlighted by him in a blog post, Binance is pro-actively working towards ensuring that the rights of its users are protected and that all issues concerning compliance and regulation are addressed while hoping that regulators and policymakers support and guide them in the process so that there is sustainable and responsible development.

CFT, as a premier digital asset management company and a proud partner of Binance, assures its clients that the best minds in crypto are at work to iron out creases with regards to creating a regulatory framework. In the meantime, all activities are proceeding with full care, safety and security. The SEPA transaction suspension – transactions involving Binance to EU banks – that happened last summer was forced upon Binance by “external conditions.” However, Binance meticulously resolved the issue and now the transfers have become seamless.

Binance has successfully addressed the challenges it has faced like a true leader and is working closely with governmental authorities in making sure that the interests of all its stakeholders are safeguarded.