The chief executive of the world’s largest crypto exchange is calling for strict oversight rules on the flourishing cryptocurrency industry.
Changpeng Zhao, CEO of Binance, is calling for the establishment of stiffer crypto regulations on the booming and rapidly growing market.
Zhao’s remarks come at a time when the crypto exchange listed “10 fundamental rights for crypto users”, hoping to start a (deep) conversation among financial regulators and policymakers in Congress.
Zhao said global regulators are closely watching the crypto industry this year, and many are reaching out to Binance on the best way forward. He now feels “this is the right time” to start talking about regulations and oversight rules.
“This year, most of the regulators around the world are looking at crypto intently, and many of them are communicating with us”.
He continued saying industry players should converge at the table and discuss … “some regulations [because] if the [regulations] are made in a vacuum, may not have practical considerations in how they are applied, and they don’t get applied very well”.
Scrutiny on crypto industry intensified
Scrutiny of the cryptocurrency industry has been intensified, thanks to the industry going mainstream over the years. A case in point is how Bitcoin soared to new record highs last week (nearly hitting $69,000 before taking a plunge again).
Cryptocurrency is becoming so mainstream that the Staples Center is rebranding to Crypto.com Arena on Christmas Day albeit fans protests.
Other industries, such as Ride-Sharing, are pushing for regulations before even becoming significant companies in the field.
Consumer protection is not well-defined
Gary Gensler, the US Securities and Exchange Commission chairman — who once aptly referred to the crypto industry as the Wild West — said investors aren’t well protected.
“Right now, we just don’t have enough investor protection in crypto. This asset class is rife with fraud, scams, and abuse in certain applications.”
Gensler further disclosed that the cryptocurrency hype is “blinding” many investors from understanding how digital assets work.
“There’s a great deal of hype and spin about how crypto assets work. In many cases, investors aren’t able to get rigorous, balanced, and complete information”.
Binance is acknowledging that cryptocurrency platforms should come up with clear consumer protection frameworks and implement measures preventing Illicit crypto trading — along with working with global regulators and lawmakers in setting standards that will keep investors safe.
Binance calling for regulations seems strange, but the CEO says regulating the industry is inevitable. He says regulations will help Binance to play a key role in the discussions, even attract more hesitant people to join the crypto bandwagon.
