Crypto exchange’s Binance CEO Changpeng Zhao said on the 16th that Binance needs to set up its headquarters in order to operate in compliance with the regulatory requirements.
Until now, the company did not have a specific head office in a particular country or location and was operating in a decentralized manner.
However, as regulators around the world have increased their scrutiny on Binance, the company is working on building a centralized headquarters in multiple jurisdictions. This move, to a certain extent, might soften regulators’ stance on the company.
Zhao’s remarks came during an interview with the South China Morning Post where he revealed that the company’s model of working in a decentralized manner did not go well with regulators. He said:
“Four years ago when we started it, we wanted to embrace the decentralized model so we wanted to have decentralized teams everywhere. But we do run one centralized exchange, which is the biggest part of our business. Now we have come to realize that for the regulators, we need to be centralized.”
So far, Binance has been warned by authorities from Japan, Hong Kong, Italy, Singapore, the UK, and several other countries for operating with relevant licenses. He said:
“There are very simple questions regulators usually ask us [to] which our response is kinda funny. The regulators ask us where’s your headquarters, and our responses is, well, we don’t have headquarters. That doesn’t go well with regulators. They don’t know how to work with us. Sometimes they even think we are dodgy obviously.”
Apart from this, Binance has recently made several efforts to appease regulators such as recruiting high-profile individuals, mandating KYC, anti-money laundering measures as well as risk management. In an interview with Nikkei Asia, CZ remarked:
“Every country’s looking to have a different set of regulations and they want to meet somebody face to face locally. We need to hire more teams in each country, and we want those to be seasoned compliance people so that they speak the same language as the regulators.”
Meanwhile, Binance has not yet decided where it would open its headquarters.