Crypto exchange Binance will announce the location of its holding company "soon," CEO Changpeng "CZ" Zhao has revealed.
Speaking at the Financial Times Crypto and Digital Assets Summit, Zhao was asked where the holding company that sits at the top of a "traditional corporate structure" is based, in Binance's case. He replied, "We already have that," and that "we will announce that soon."
Zhao added: "If you want a centralized exchange, which Binance.com is, and you want to have access to traditional banking […] you have to sort of backtrack a bit and follow the rules in the traditional financial systems.
"You have to have a corporate headquarters, you have to have a parent company, and you have to get licenses; the regulators have a certain structure that you expect."
Binance's history with regulators
Zhao's statement represents something of a volte-face for the exchange; for several years, he's argued that the company had no headquarters, stating that "everybody's definition of a headquarters is slightly different."
Regulators largely appear unimpressed by Binance's argument that its business is decentralized; in 2021 alone, Japanese, Dutch, Italian, and Malaysian regulators, plus some from the Cayman Islands, all either issued consumer warnings about Binance, or took steps to limit the exchange’s services in their territory. The UK's Financial Conduct Authority went so far as to argue that Binance’s UK entity, Binance Markets Limited, was “not capable of being effectively supervised,” having refused to provide basic information about its business.
Speaking at the FT summit, CZ conceded that the exchange had changed tack: "When we first started, we wanted to embrace the decentralized philosophy of no offices, no headquarters, no corporate entities; none of those are needed if you run a pure crypto exchange. But as soon as you want to get licenses, you have to have what we call the traditional structures, which we do now."
In recent months, Binance has shifted toward a more traditional corporate structure; speaking at the FT summit, Zhao noted, "We have extended corporate structure now; that's a prerequisite for getting licenses." Binance, he added, now has licensed entities in Abu Dhabi, Dubai, and Bahrain, with licenses in a "G7 country in Europe" and the U.S. set to come "very soon." Earlier this month, CZ praised France's "pro-crypto regulations" as the exchange announced it was getting floorspace in a Paris start-up incubator.