Binance, the world’s largest exchange for trading Bitcoin and other cryptocurrencies, says it’s time for global regulators to establish rules for crypto markets.
The call for regulation might seem strange for an industry whose popularity exploded in some part precisely because it sought to operate outside the heavy hand of governments and other authorities.
“This year, most of the regulators around the world are looking at crypto intently, and many of them are communicating with us,” Zhao said.
Big businesses, professional investors and even the government of El Salvador are all buying in, even if critics struggle to see the value of digital currencies created by non-governments.
“They’re doing what Uber and Lyft did,” said Gil Luria, technology strategist at D.A.
Zhao said that Binance welcomes regulations “for many reasons.
A competitor, Coinbase, has already fetched a nearly $74 billion market value on Wall Street following its initial public offering this spring.
“This asset class is rife with fraud, scams, and abuse in certain applications,” he said.
One of Binance’s “fundamental rights” also calls for strict regulations on marketplaces that offer “derivatives and leveraged instruments,” which can be lucrative but also very risky trades for investors.
Most regulators around the world are focusing on “know your customer” rules, where financial companies try to verify the identity of who’s using their services, Zhao said.
But even there, “different countries do have different interpretations and different meanings for these very simple words,” Zhao said.
Given all the complexities, Harvey said the best solution may be for the U.S.
Zhao, who said the only cryptocurrencies he owns are Bitcoin and Binance coin, said some parts of the cryptocurrency world look more like securities, while others look more like commodities or currencies.