Changpeng Zhou, CEO of Binance, has strongly rebuked Maltese officials that have claimed his exchange is not authorized to operate in the island nation. Zhou asserts that Binance is not headquartered in Malta, but rather is a decentralized company.
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Zhou’s comments are surprising, as Binance has had an office in Malta since 2018. The company has also taken a series of steps that indicate integration with the Maltese economy, such as funding a malta-based cryptocurrency bank, and working with the Maltese stock exchange.
Zhou addressed Binance’s status in a series of tweets:
https://twitter.com/cz_binance/status/1230860648541818880
He has made it clear that he does not consider Binance to have a central headquarters:
https://twitter.com/cz_binance/status/1230860651200942080
It is worth noting that the announcement by the Malta Financial Services Authority does not criticize Binance. Rather, it merely states that Binance does not presently have operations in the country that fall within the “realm of regulatory oversight.” It also notes that it is assessing Binance’s activities to determine their regulatory status.
Thus, it is reasonable to assume that the Maltese government remains welcoming to the exchange, yet more should be done to ensure proper regulatory compliance.
Binance was initially based in China, but left after the Chinese government became hostile to crypto exchanges. It also attempted to establish an office in Japan, but chose not to after clashing with Japanese regulators.
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Zhou’s assertion that his exchange is a decentralized company may be technically correct. It has servers around the globe, many in secret locations. It operates almost everywhere, with employees in many countries.
This type of organization is not unusual. Many large corporations have a multinational presence, yet still base themselves within the borders of one state. Should Binance continue down the path of seeking legitimacy on a global stage, it is all but certain that it will need to do the same.
Binance, is, of course, unique in that regulating blockchain assets is a very difficult issue for global leaders. Until today it has been considered a Malta-based company due to the island nations’ crypto-friendly policies. Nevertheless, the extent to which this is the case is now unclear.
Maltese regulators will likely clarify their stance on Binance in the coming days. They are no doubt aware of the tremendous potential of having a close relationship with the world’s largest crypto exchange. Exactly what this relationship will look like moving forward remains to be seen.
What do you make of the latest breaking Binance news? Add your thoughts below!
Images via Shutterstock, Twitter @cz_binance