How Binance became the world's biggest crypto exchange without a headquarter or licenses.
Ever since the rise of Bitcoin and other cryptocurrencies, these digital assets appear to have become the preferred option for all investors.
Binance is a cryptocurrency exchange that is at the top of the list when it comes to analysing the entire crypto ecosystem.
The crypto exchange's innovative decisions have helped it become the world's fastest-growing major financial exchange, despite the fact that it has no head office or formal address, lacks licences in the countries where it operates, and has a CEO who wouldn't respond to questions about his location not long ago.
Binance began as a cryptocurrency exchange in 2017 and has since grown to become the largest player in the $2.6 trillion cryptocurrency market. Multiple crypto exchanges, numerous cryptocurrencies, the Trust Wallet and its TWT token, a Token launchpad, and more are all part of the exchange giant's ecosystem.
Binance executes more trades for cryptos like Bitcoin and Ethereum each day, totaling $76 billion, than its four biggest competitors combined, as per data provider CryptoCompare, The Wall Street Journal reported.
Is it the end yet?
Years of essentially unrestricted, unregulated expansion for Binance, and the cryptocurrency sector in general, are coming to an end.
Italy, Japan, Canada, the Cayman Islands, Thailand, Malaysia, the United Kingdom, the United States, South Africa, and Singapore are among the nations where the crypto exchange is facing legal issues.
Many investors, not just financial regulators, are likely to partake in proceedings against Binance, seeking damages for money lost during a major downtime.
Many investors are having difficulty figuring out how and where to sue the crypto exchange to court because it has no recognised headquarters.
Despite its importance to the crypto ecosystem, Binance's legal issues could have a significant negative influence on cryptocurrency pricing.
Financial regulators, in particular, have expressed growing concern that digital assets have grown so quickly that they have become systemically important.
In an October speech, Bank of England official Jon Cunliffe referred to the 2008 subprime-mortgage-fueled financial crisis, saying of crypto, "When something in the financial system grows very fast, and grows in largely unregulated space, financial stability authorities have to sit up and take notice."
Meanwhile, according to the article, the Securities and Exchange Commission (SEC) is looking into how Binance works in the United States, where it holds numerous state licences. According to the article, the Department of Justice is also looking into whether the crypto exchange has facilitated money laundering.
In a recent interview, Binance founder and CEO Changpeng Zhao stated that the crypto exchange must comply with regulators around the world, which includes obtaining required licences from the relevant governments.
"We run a very legitimate business," he said, adding that it has developed quickly as a result of users' trust. However, Zhao pointed out that "if you look at bitcoin use globally now, it's probably less than 2%" of the population. "We need to be controlled in order to attract those 98 percent of individuals," he stated.
Zhao also indicated that Binance is in the process of establishing local offices and a headquarters, which he previously dismissed as antiquated but which authorities need.
In August, the crypto exchange said on its website that it has made user identity checks mandatory in order to prevent the exchange from being used for illegal money flows.
Binance employs 3,000 people worldwide, according to Zhao. On Twitter, where he is simply known by his initials, CZ, the crypto world's rock star has 3.9 million followers.
Zhao, who was born in China, relocated to Canada with his parents when he was 12 years old, according to him.
Zhao worked in financial companies in New York and Tokyo after studying computer science, including Bloomberg LP, where he developed software for futures trading.
Zhao, he first learned about bitcoin at a poker game in Shanghai in 2013. He sold his Shanghai flat for bitcoin and worked for a number of crypto businesses, enthralled by the idea of a decentralised currency that could be used anywhere without the need for banks or administration.
Zhao founded Binance in 2017 with a group of other programmers. Initially, the exchange focused on trading bitcoin and its various offshoots, but it did not allow customers to trade digital currency for traditional coins.
Zhao added that Binance did not require a bank account or a headquarters when it first began operations.
In a July 2017 initial coin offering, the crypto exchange raised $15 million for its digital token, BNB.
Binance became the largest crypto exchange in six months because users flooded in from countries with less developed financial systems, like as India, Russia, and South Africa. However, it immediately ran into issues with authorities all around the world.
