Regulators issue consecutive warnings to Binance, founder Changpeng Zhao releases open letter: Putting user protection first, clear regulations are key to growth

Binance has recently been receiving warnings from international regulators and some banks have stopped providing services. Although this has not significantly impacted the token price, the actions of the world's largest exchange are inevitably something that other exchanges in the industry must face. Founder Changpeng Zhao (CZ) has recently responded for the first time in an open letter:

Changpeng Zhao's Open Letter on Regulatory Compliance

"Prior to the emergence of clear industry guidance, we have always held Binance to the highest standards, prioritizing the best interests of our users - a goal we share with regulatory bodies around the world." The letter begins by explaining the idea of "user protection first" to users.

Changpeng Zhao listed the self-imposed requirements and industry standards that Binance has adhered to:

• Strict insider trading policies
• SAFU secure asset fund for users
• Strict listing standards
• Conflict of interest avoidance mechanisms for listing teams
• User education through Binance Academy
• Establishment of restrictions and protective measures for high-risk products

Regarding anti-money laundering measures, Changpeng Zhao also mentioned that Binance has been cooperating with the U.S. Internal Revenue Service (IRS) and the UK's Financial Action Task Force (FATF) to prevent money laundering, terrorist financing, fraud, and other illicit activities. It is reported that Binance has accommodated 5,600 investigation requests to date and has recently assisted in cracking a money laundering case involving over $500 million.

Ongoing Compliance Measures

Changpeng Zhao stated that Binance is currently implementing the following initial compliance measures:

• Expansion of the international compliance team: Binance has already collaborated with two former FATF officials and a former U.S. ambassador to China to provide compliance guidance. The compliance team is expected to double in size over the next year.
• Enhanced compliance cooperation: Collaborating with partners such as CipherTrace to integrate regulatory technology to protect users and prevent money laundering. More international collaborations are planned for the future.
• Localization of operations/cooperation with local regulators: For example, with Binance.US as an independent entity, localized compliance and regulated exchanges are being launched, striving to cooperate with regulatory bodies in various countries.

Clear Regulations as a Key to Growth

In its four years of existence, Changpeng Zhao mentioned, "We see a more widespread adoption of cryptocurrencies globally, necessitating clearer regulatory frameworks in different countries. In fact, the more regulations there are, the more positive sign it is for an industry maturing, as it lays the foundation for a safer participation of the masses in cryptocurrencies. I believe that in the long run, comprehensive legal and regulatory frameworks will become an essential foundation that makes cryptocurrencies indispensable in everyone's daily lives."

Changpeng Zhao believes that Binance's clarification and establishment of the first set of standards are crucial for industry growth, and Binance will also contribute to this cause.