In May last year, when the CEO of the world’s largest crypto exchange was asked where his company is headquartered, Changpeng Zhao, or CZ, for short, the answer was that Binance has no headquarters—it is in keeping with the decentralized ethos. Keeping in mind is a decentralized company. of the crypto industry.
He also challenged the definition of headquarters: “Is the office where people sit? I’ve worked from home for the past three and a half years. Our leadership team is not sitting in an office, we don’t have a clear place where we can be.” Headquarters can go by most people’s general definitions of what we might call headquarters.”
A year later, the answer to CZ’s question has changed. he still can’t say Binance Headquarters, but he says the answer is coming soon.
“We have a global holding company, a global holding entity for a centralized exchange,” he said. on the latest episode of decryptThe GM Podcast.
so where is it? “We haven’t announced it yet,” he said with a laugh. “We will announce it in due course. But it’s very simple. It’s not that complicated.”
It’s CZ that made it complicated. Binance is five years old, and has spent its short history clashing with regulators around the world, even though it has grown enormously. In its first few years, the company was reportedly based in China, Japan, Taiwan and Malta at different times.
In 2017, it was registered in the Cayman Islands. In 2019, it also registered in Seychelles. But by 2020, authorities began to notice the company’s lack of licenses: Malta issued a statement saying that Binance does not have a license to operate there. Malaysia followed suit, saying Binance was operating illegally in the country.
Now CZ has changed its approach, which it admits was not working with regulators.
“We surrendered,” he said decrypt, “When we started five years ago, there was very little regulatory framework in place. And in fact, most of the regulators we talked to … they told us, ‘We don’t regulate this industry, you’re closed, we are’. Not included.’ So in those days, we were adopting a decentralized philosophy, and it worked really well for us.”
Now, as the industry matures, regulators aren’t saying “you’re off.” Now, his first question is: Where is your headquarters? “And we said, look, if we want that, what’s the best way forward… as a centralized business, as a centralized exchange? The best way is to give them that structure. So we Set up local offices, local institutions, local compliance, legal, rented out this whole structure.”
During the pandemic, Binance has opened offices in cities like Abu Dhabi, Bahrain, Dubai and Paris, a list CZ Proudly closes off. “When people ask about our headquarters… we have the structure now. So now we satisfy both sides.”
Of course, this still isn’t an answer to HQ’s question. Many large companies have offices all over the world; They still keep the same address. What does CZ say when a regulator asks where the company is located? “Well, if we’re in France, we say ‘look, right here in Paris,'” he said. “If we’re talking about the Middle East, it’s Bahrain and Dubai and Abu Dhabi. So now people can go to their nearest office, and if they have a problem, they can find us, they can find us. can talk.”
It might just sound like more deflection, but for CZ it represents real progress. They also claim that the company’s separate entity in the states that Binance US, launched three years ago, has obtained money transmitter licenses in 46 states – a thorny process as each state makes different demands. (New York, Vermont, Texas and Hawaii are on holdouts until July 10.)
With its attempt to play nice with regulators, CZ seems like a politician – perhaps taking a page from its rival Sam Bankman-Fried, an FTX founder who has made several trips to Washington (to his company). Even after relocating to the Bahamas) ) to lobby on behalf of the industry.
CZ is hesitant to say whether the US has any stricter crypto regulations than anyone else—even as other industry leaders rail from SEC Chairman Gary Gensler about the cold shoulder.
“I don’t think America is behind,” CZ said. “The US is more strict on yield-generating products, interest-generating products, futures, et cetera. Different countries are a little different… America has many different political parties, many different agencies And even in the Senate, you can see that some senators are very pro-innovation. Some senators want to be like, ‘Let’s keep the US dollar maxed out, for the longest time, until we Can do, and the next thing is not.’ Or maybe they don’t realize that they won’t have the next thing. But you know, the debate is going on. This is democracy.”
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