Binance GM talks return to S’pore as it works with regulators

After the crypto winter, Binance has emerged as a mainstay of the crypto industry. While competitors like FTX collapsed due to poor fund management, Binance took advantage of its prudent practices and focused on consumer protection.

The company is the largest crypto exchange by any measure, currently processing more than US$6 billion in daily trades, almost double that of its next closest competitor. It accounts for more than half of the stock market share and is one of the few crypto companies that continued to hire during the market crash.

In addition, Binance has helped rescue crypto companies affected by the winter by pledging US$2 billion in financial support last November. The company today carries enormous responsibility, any failure – security flaws, liquidity crises – will surely spell disaster for the wider industry.

Binance General Manager (GM) for the Middle East (MENA), Alex Chehadeh, is confident that the industry is in safe hands and Binance will not be responsible for a crypto winter like the current one. “We are very conservative. We were the first to come out with proof of reserves.”

As is becoming commonplace in crypto exchanges today, Proof of Reserves confirms the manner in which a company holds its clients’ assets. For example, Binance stores all user assets 1:1 and maintains additional reserves.

This ensures that users can withdraw their funds at any time, Chehadeh says, adding that “there’s very little chance of failure that way.”

In search of a home

Regulations have been a hot topic since the crypto winter, and rightly so. For the industry to mature, there is a dire need for policy makers to step up and ensure that consumers are well protected from bad actors.

For companies, too, regulations help establish clear boundaries within which they can operate. Although Binance CEO Changpeng Zhao prides himself on his company’s headquarters;lessit still needs regional hubs that provide regulatory clarity.

In December 2021, Binance withdrew its application for licensing in Singapore and signed an agreement to work with Dubai regulators on policy. Since then, the Emirate seems to have become the home of choice for the company.

Dubai gave Binance a chance to make its mark here [UAE]. From top to bottom, the government has made announcements and made a real push to enable the Web3 economy in the region. They legislated for crypto licenses and financial institutions before the rest of the world. That’s what spurred action in the region.

– Alex Chehadeh, Binance General Manager Middle East (MENA)

It was very important for Binance to see a trajectory and a long-term plan for the future of crypto. Dubai clarified its regulations, which was enough to convince Binance to set up shop and house more than 600 employees in the city.

The company has since obtained an MVP license from Dubai’s Virtual Asset Regulatory Authority (VARA), which allows it to offer its services to qualified retail and institutional investors.

“We worked [VARA] create regulations and now they have FMP, a full market participant, the program that we hope for [become a part of] later in the year,” says Chehadeh. This will allow Binance to open its platform in Dubai to mass retail customers as well.

Lessons from a stealthy winter

To avoid a repeat of crypto winter, Chehade believes it is up to regulators to ensure business safety, transparency and compliance.

What the UAE has done well is that they have given very clear guidelines and regulations and there is no ambiguity about the body that licenses the company.

– Alex Chehadeh, Binance General Manager Middle East (MENA)

Binance Dubai
Binance signs deal with Dubai regulators in 2021 to help grow virtual asset ecosystem / Image Credits. Unlock Blockchain

Today, VARA is the only independent body in Dubai dedicated solely to the regulation of virtual assets, and having such a structure helps avoid policymaking gray areas. “We need a consolidated view of the industry and its products,” says Chehadeh.

In other jurisdictions, it is common for a number of different regulatory bodies to deal with crypto activities, which can lead to unnecessary complexity. “That’s the gray area that needs to be addressed,” he adds, hopeful for the near future.

That said, there are positive signs that changes are on the way. “With the collapses, regulators re-examined their understanding of how [crypto] the players are working. It’s fueled more conversations and we’re coming out of winter in much stronger shape. There has been a lot more discussion and conversation between regulators and industry players.”

Return to Singapore

While Chehadeh acknowledges that the Middle East has taken the lead globally, resulting in Binance’s focus in Dubai, the company is still committed to working with the Monetary Authority of Singapore (MAS) on a possible return to the city. – state.

biance
Binance to stop offering exchange services in Singapore in February 2022 / Image Credits. TechCrunch

When Binance initially withdrew its license application, there was no clarity on the future of crypto in Singapore. However, the past year has brought some key developments.

As MAS has produced and published more information about their regulations, we have engaged with them more. We have to work closely with the regulators and that has to be clear and distinct.

Most recently, [the MAS] published proposals enhancing consumer protection and we engaged in correspondence.

– Alex Chehadeh, Binance General Manager Middle East (MENA)

Following the collapse of FTX, Binance’s CEO published six principles emphasizing user protection, which he believes are essential for all centralized exchanges. As this is a core part of Binance’s philosophy, Chehadeh says they are happy to engage with MAS on this issue.

As it stands, Binance is actively pursuing a license in Singapore through its custodial arm, Ceffu. “We are eagerly working to create an institutionally focused watchdog in Singapore,” says Chehadeh.

Featured Image Credit: Binance / Gulf Insider



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