The largest crypto exchange in the world, Binance, is negotiating with sovereign wealth funds to attract investment, trying to improve relations with state authorities and smooth out the aggressive policy of regulators. About the found way of interaction told the head of the company Changpeng Zhao in an interview with the Financial Times.
The company is facing mounting pressure this year from authorities and finds that fund investments can improve its image in the eyes of governments around the world and reassure them, Zhao said. “However, it will also link us to specific countries, and in this regard, we would like to be careful,” said the head of Binance.
Zhao also said that the organization is conducting preliminary negotiations on raising capital from several sovereign wealth funds, but he did not specify which funds in question, adding that the process will not be quick.
Binance made the decision amid searches for headquarters in cities such as Singapore and Dubai. The company provides services to consumers around the world, but faces regulatory criticism for its high-risk financial products, including derivatives trading. Until recently, Binance hid the whereabouts of its founder and insisted that it did not have a permanent headquarters.
It was founded in China, but left the country in 2017 after the ban of crypto exchanges and organized a number of offices in different cities. Zhao said the ban on mining cryptocurrencies in China signals the government’s intention to create obstacles to technologies that compete with its own: Beijing is actively promoting its central bank’s digital currency.
On September 24, the People’s Bank of China (analogue of the Central Bank) banned any activity related to cryptocurrencies. After that, Binance, like other major exchanges, excluded the registration of Chinese users. The company said the app is not available for download in the country. “Binance takes its commitments very seriously and strives to comply with local regulatory requirements wherever we operate,” a company spokesman said.
The exchange is facing pressure from financial regulators around the world amid concerns about weak user protection and the use of cryptocurrency for money laundering. Against the backdrop of the requirements of different countries, the exchange in August announced the adoption of stricter user verification rules, according to which new customers will not be able to access the products and services of the trading platform without identity verification.
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