Appearing on aMay 29 episode of the Bankless Podcast, CEO of Binance Changpeng CZ Zhao spoke on various topics in the digital asset space, from the controversies of 2022 to privacy, regulation, and banking. <\/p>\n
During the hour-long podcast episode, CZ extolled the financial access virtues of digital assets, spoke on the FTX collapse, market downturns, and spent a significant portion of the discussion railing against fake news and negative propaganda campaigns. <\/p>\n
The Binance chief was keen to reassure listeners who may have been influenced by these so-called FUD campaigns (fear, uncertainty, and doubt), which he claimed were excessively targeted against Binance and Tether due to their relative size and importance. <\/p>\n
If you write a negative article about a small exchange nobody cares, you dont get clicks. Whatever article, if you put Binances name in the title and something negative, people click more, he said. <\/p>\n
This is, of course, a variation of the old people hate successful people schtick and a very convenient way to dismiss stories such as thecommingling of customer funds with operating capital,being probed for helping Russia dodge economic sanctions, andfacilitating transactions by Islamic terror groups. <\/p>\n
Ironically, this discussion of fake news was used as a springboard for CZ to pitch Binance as a transparent platform, noting the proof of reserves that the company has instituted in the past yearnofake newshere. <\/p>\n
He went on to explain that a commitment to privacy prevents the company from being more transparent: As a private company we need to make sure our privacy is protected, if we publish all of our wallet addresses that we use and make it very clear which vendors we use, those vendors may be attacked by hackers. <\/p>\n
Outside of his noble concerns for vendor security, another key topic of discussion for CZ was banking. <\/p>\n
The subject came up when hosts David Hoffman and Ryan Sean Adams asked him the listener question, Can you please, buy a bank and make it crypto-friendly? To which the Binance chief responded, we did look at that. <\/p>\n
A backdoor into banks <\/p>\n
This question came from the tech bank collapses of early 2023, notably Signature, Silvergate, and Silicon Valley Bank (SVB). The failures of some of the few crypto-friendly banks in the U.S. market precipitated discussions around the future of banking in the digital asset industry, with some suggesting it wouldpush companies further into the arms of the less regulated Shadow Banking space. <\/p>\n
Hence, the idea of Binance setting up or buying its own crypto-friendly bank might appeal to some market participants. However, while CZ did admit the thought had crossed his mind, he indicated it was not really a practical solution: <\/p>\n
The reality is much more complex than the concept. You buy one bank, it only works in one country, and you still have to deal with the banking regulators of that country. It doesnt mean you can buy a bank and do whatever you wanna do. If the banking regulators say, look you cant work with crypto then they can take your license away if you do. So buying a bank doesnt prevent regulators from telling you no you cant touch crypto.' <\/p>\n
This sentiment seems to echo complaints aired in the light of the tech-bank collapses, which pinned the blame on increased regulatory scrutiny, particularly from the U.S. Securities Exchange Commission (SEC) and a weaponizing of FTX and the 2022 crypto winter to squeeze digital assets out. <\/p>\n
CZ also argued that running a bank would not be financially viable or profitable, stating: <\/p>\n
Banks are not cheap. Banks are very expensive for very little business revenueThe amount of capital required is quite high, and the regulatory approval for buying a bank is the same or more as setting up a new bank, which is very onerous. <\/p>\n
An alternative route that does seem to be in Binances thoughts is becoming minority investors in banks. <\/p>\n
We may make small investments into banks, become minority investors, so hopefully that influences them to be more crypto-friendly, CZ remarked. <\/p>\n
This possible way around the onerous regulatory approvals of setting up or buying outright a bank would make a lot of sense for the regulation-shy CEO, who elaborated on his opinions around current regulatory regimes in another section of the podcast episode. <\/p>\n
On regulation <\/p>\n
Discussing which jurisdictions are doing regulation well, CZ pointed to the Middle East and Europe, specifically mentioning the EUs Markets in Crypto Asset (MiCA) regulation, whichpassed its final vote this April and should come into force in 2024. <\/p>\n
Were working quite closely with France, CZ said, MiCA is still restrictive, but its not too bad, its pretty good. <\/p>\n
The inference here is that for CZ, restrictive is a byword for bad. In this vein, he also complimented an easing of regulation in Japan, but did not reserve any praise for the U.S. current regulatory efforts. <\/p>\n
This is perhaps unsurprising, as the SEC has recently ramped up its enforcement actions, and Binance iscurrently being suedby the other major financial market regulator, like the Commodity Futures Trading Commission (CFTC), for a calculated, phased approach to violating U.S. commodities regulations. <\/p>\n
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Binance's Changpeng Zhao complains of fake news and hints at ... - CoinGeek<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Appearing on aMay 29 episode of the Bankless Podcast, CEO of Binance Changpeng CZ Zhao spoke on various topics in the digital asset space, from the controversies of 2022 to privacy, regulation, and banking. During the hour-long podcast episode, CZ extolled the financial access virtues of digital assets, spoke on the FTX collapse, market downturns, and spent a significant portion of the discussion railing against fake news and negative propaganda campaigns. Continue reading