Binance Takes Further Steps To Address Crypto Exchanges Regulatory Issues
The cryptocurrency market has been a difficult industry for companies and firms to operate. Regulations and regulatory agencies have not created clear ecosystems and frameworks where companies could launch and expand their crypto-related services.
Binance is not out of this discussion. This is why it has been working so as to address some of the most complex regulatory issues posed to crypto exchanges, platforms and companies. Binance is one of the largest exchanges in the world and it is not taking some clear and decisive steps towards providing regulatory clarity to clients.
Binance Participation in the Crypto Market
Binance has been working in order to deal with regulatory challenges that the crypto industry is currently facing. The exchange is taking different measures that would let it be compliant with some of the most advanced regulatory frameworks in the countries where it currently operates.
This exchange is clearly among the largest and most useful around the world due to the large number of services offered. But the goal is not only to become the exchange with the largest trading volume but also to be the platform that investors can trust.
In order to do so, it is necessary for the exchange not only to become a recognized platform but also to take clear and decisive steps towards becoming a more regulated participant in the market.
For example, one of the things that have already been taken into consideration was the standardization of regulatory standards. The goal is to offer clear regulatory information to users and a better experience for all of its clients in different regions.
Of course, this is plagued with challenges. But Changpeng Zhao, the CEO and co-founder of the platform, is leading a team of experts to handle some of the most complex questions in terms of crypto regulations.
In the next sections, we will share with you all the latest projects in which Binance has been taking part to offer regulatory certainty to its clients and investors.
Recently Regulatory Measures
Let’s start by understanding some of the most recent regulatory measures taken by Binance to offer clarity and better solutions to clients. For example, on July 16th, 2021, Binance became the first exchange in the world to limit new users to maximum leverage of 20x.
This is something that other regulated brokers in the financial market were already doing in the past. Although leverage could be a very profitable tool for expert traders, it has also been a reason to get worried for regulators. Some novice users were trading with as much as 100x leverage without realizing the risks involved.
Now, all the new accounts opened 60 days before July 16th, would have the same rule. They would not be able to trade with leverage of more than 20x. This is just one of the measures that Binance is taking to protect users’ portfolios.
This is in line with Binance’s goal to make the company a regulated financial institution. Through these limits, it would be possible to get closer to licensing and compliance in some jurisdictions. Additionally, there could be regional headquarters opened in some locations in order to strengthen communication with regulators.
That means that Binance is working in order to expand its compliance department and show investors they are working side by side with some of the most respected regulators around the world.
In order to be compliant with regulators in Western Europe, Binance announced on July 30th, that they are planning to wind down their derivatives products in Germany, Italy and the Netherlands. Binance has been offering derivative products for several years now. The decision was just the beginning, as they have also restricted Hong Kong users as well on August 6th.
This shows Binance commitment to be compliant with local regulatory frameworks. Additionally, they have been the first major crypto platform in the world to proactively restrict access to derivatives products.
Finally, one of the latest measures taken by Binance includes a new way to handle API key verification. With the API key, a large number of traders had access to trading bots and financial services offered by companies connected to Binance’s API. Now, the platform has decided to update its API service by limiting new API key creation to verified accounts.
Why did they decide to do so?
This is also part of Binance’s goal to protect users and safeguard their investments. Binance wants to ensure a safe and fair trading environment for all market participants. This is a key thing to remain compliant with the latest industry requirements and remain a leader in the market.
All these measures aim at making Binance one of the most compliant exchanges in the market. In this way, they address some of the challenges faced by the cryptocurrency industry, protect traders and cooperate with regulators in different jurisdictions.
Improved Infrastructure
The decision to take the above-mentioned reforms is also part of a broader strategy to improve Binance’s services. A compliant exchange is also required to provide users with improved solutions and infrastructure to meet their needs.
One of the many changes applied by Binance includes the tremendous effort in improving its customer support system. This is something that has severely affected the number of exchanges, and Binance has taken the lead analysing possible weak points and reacting to solve them as soon as possible.
With the release of the Online Chat 5.0, they were able to meet the demands of users that requested support and help from Binance representatives. In this way, rather than waiting days to get a simple problem solved, individuals are now able to get answers to their questions in seconds (immediately).
Furthermore, the investment in infrastructure includes an extended Frequently Asked Questions (FAQ) section. This helps users check and analyse the most commonly asked questions without necessarily having to contact the support team. Additionally, there are many other self-service tools to which users can get access in just some steps.
Furthermore, customer support is a very important topic to handle for Binance. This is why they have tripled the number of Customer Support representatives. This comes not only with an increase in the number of customer support agents but also more languages available to offer direct help to users in seconds. In this way, Binance is able to improve its capacity to solve inquiries and reduce the turnaround times.
These are just some of the measures implemented by Binance to deal with one of the most common requests from users: improving customer support. Although these are just some measures, Binance is moving forward with new initiatives that could help clients get access to the information they need.
Users Interests’ Protected
All these measures have a clear goal: protect users’ interests while using the platform. For example, they have created industry standards that other companies are also following. We are talking about strict insider trading policies and a Secured Asset emergency fund (SAFU), which aims at protecting users’ assets.
The Secured Asset emergency fund would be used to protect users’ funds in case of an external attack. This fund would allow users to be sure that their assets are safe at all times, even in the extreme and unlikely case the Binance exchange would be hacked. This is a last-resort measure taken by Binance to protect all the traders and crypto enthusiasts on its platform.
Furthermore, they have also in place a rigorous listing standard to onboard projects that have real value for the cryptocurrency market. Binance has been recognized over the last year for bringing some of the most promising and advanced projects to the market. These tokens are now sold to investors and they can get access to them as well.
Furthermore, with the Binance Launchpad, new companies that want to release their tokens can simply do an Initial Exchange Offering (IEO). This is how Binance is working to protect users’ interests. But there are many other initiatives that Binance is working on to protect users.
In addition to the above-mentioned things, Binance has decided to add limits and protections to encourage responsible trading in some of the higher risk products they are offering. This pushes users to understand the risks involved and avoid unwanted results if the market moves in the wrong direction.
With that in mind, Binance is the only crypto platform in the market with a responsible trading program. This is why they are now working with law enforcement agencies such as the Internal Revenue Service (IRS) from the United States or the United Kingdom South East Regional Organized Crime Unit.
The goal is to crack down on cybercrimes such as money laundering schemes, terrorist financing and also scams. Throughout 2021, there have been more than 5,600 investigations. That represents 100% more than last year.
It is worth taking into consideration that they have also made every single effort to protect users’ funds, including those individuals that have been using the Binance Smart Chain (BSC) blockchain network. This has helped users to get lost funds recovered.
Finally, the exchange is rewarding those users that help to improve the security of the Binance ecosystem. There are regular bounty programs and rewards for those individuals.
Working for Better and Clearer Regulations
Growing a sustainable blockchain and crypto ecosystem requires time and good contact with regulators worldwide. But this cannot be possible if there are no clear regulations. This is why they are growing their international compliance team and advisory board by 500% since 2020.
They have appointed very recognized figures in the financial regulatory industry such as the former FATF Executive Strategy Rick McDonell and the former Head of the Canadian delegation of the FATF Josée Nadeau as compliant regulatory advisors.
These are just some of the measures that Binance is taking to work for better and clearer regulations in the crypto industry. But there are other initiatives in which Binance is working on. They are also planning to expand their robust compliance partnership with other top companies such as CipherTrace for protecting users and the industry.
Furthermore, there is a plan to double their team size before 2022 with additional qualified and experienced advisors. This would help not only Binance’s users but also all crypto users. That being said, Binance is also working with regulators to clean anti-money laundering (AML) audits.
For those users in the United States, Binance is operating with a brand partnership called Binance.US that works as a fully independent entity. This company is compliant and regulated in the United States, thus it fully operates as a regulated exchange in the country.
Finally, Binance has also taken part in different anti-crime organizations meetings and seminars such as the United Nations Office on Drugs and Crime (UNODC) and Interpol, among others. In the future, Binance could also participate in other security-related meetings.
Social Responsibility: A Fundamental Pillar for Binance
Last but not least, Binance has also been working on different social responsibility initiatives. This can be seen with its charity foundation called Binance Charity. They have raised over $15 million to help more than 20 different projects in different regions.
These projects include education initiatives, sustainability and also many other causes. The goal is to show that one of the fundamental pillars of Binance is having a positive impact on the community. This does not only include offering crypto-related services but also taking an active part in initiatives and social causes.
For example, one of the recent projects in which Binance has been working includes its relief effort to help Haiti and its population after the recent Earthquake that affected millions of individuals in the country.
Helen Hai, the Head of Binance Charity explained about this initiative:
“The crypto community has shown compassion over the past 18 months. We graciously ask once again to step up and help the Haitian community, many of whom have lost everything.”
This is just one of the many initiatives promoted by Binance, but there are many others that will definitely take place in the future.
Final Words
Binance is a clear leader in the market, not only when we think about the services they offer to users, but also about the efforts they do to protect clients and the industry, we can see they’re towards the way of being a fully regulated exchange.
With its social responsibility projects and other initiatives, Binance is leading the way in the cryptocurrency industry.
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