Binance CEO is Focusing on Coin Manipulation and Wash Trading While Putting US Regulations on Standby
Having up-to-the-minute coverage for any kind of changes in the crypto market could mean the difference between success and utter failure. However, it is equally important to monitor the founders and platforms as well, seeing where their attention shifts. Twitter User Paul Everton recently published a tweet that advises consumers to look to Binance. The tweet reads,
“Great interview of CZ by @laurashin today on Unchained. If you did not think he's a criminal and a liar before the interview, you'll definitely think so by the end. Get your money off Binance and the other Tether exchanges ASAP!”
If users follow the link he attached to the tweet, they will be led to a podcast called “Unchained: Big Ideas from The Worlds of Blockchain And Cryptocurrency.” During the podcast, Changpeng Zhao, who is the CEO and founder of Binance, talked about a range of topics, including his early days in the market, the current state of regulations, and wash trading.
As he spoke about his original discovery of Bitcoin, he revealed that the person that got him interested was Bobby Lee, who was the founder and CEO of BTC China at the time. He described the experience by saying,
“When I discovered Bitcoin, I just knew that was the future. So, I just said… I just gotta be doing something in this space and I left my previous job without having, knowing what to do next.”
The conversation moved alone, when they spoke about how Binance was started and how Zhao felt about beginning a company from the ground up. This is where the topic of regulation came up, saying that his “philosophy” did not match other retail investors. Concerning the United States, he explained that the company was not that concerned about regulations. Instead,
“We are focused on everything else other than the U.S. So, in the US, there is Coinbase, and Gemini and a bunch of other exchanges dealing with regulation over there,” he said.
Furthermore, the world has a “bigger market” for them to be concerned with, especially since every country has different regulations to abide by. Since there are so many areas that do not understand the right way to regulate cryptocurrency yet, Binance is doing their best to work with countries to help. Most of the countries they are assisting have small populations, but that makes them easier to work with, due to their commitment to constant economic development.
Wrapping up the discussion on regulatory, Zhao noted,
“So for example, in the US, let Coinbase and Gemini figure it out. First, they are very strong, they have got a cultural background, they have got the connections, …they are fully vetted over there. So, let them figure it out first.”
As the conversation shifted to ShapeShift, Zhao wanted to talk about how AML/KYC was introduced, and how the platform was the victim of several unsavory accusations, such as wash trading and manipulation. He noted that, though there is no way to tell the reason for their protocols, he believes that they have a business reason for it. Internal policies and procedures have been setup specifically to prevent money laundering from taking place, which is why insider trading is not allowed.
However, Zhao still commented that he wanted to have the opportunity for employees to hold cryptocurrency. To prevent insider trading, these users are not allowed to sell their tokens for a minimum of at least 30 days, which has been an effective measure. He added,
“So this is a… policy we learn from the banks are back in the banking days, that’s kind of our internal policy. We don’t… let our employees day trade, and it’s not a productive thing to do anyway, for most of them.”
Binance has experienced accusations about wash trading and market manipulation in the past, based on the “obscure” coins that tend to have a high trading volume in a small amount of time. However, based on their market research from members in the community, there is no evidence that suggests that Binance has participated in such activities.
Still, Zhao himself said that defining wash trading or manipulation is rather difficult, especially considering how similar they are. He commented,
“So like, let’s say Bitcoin’s like… 6300 US dollars on my exchange. Some guy just wants to buy it all the way on Binance to all the way to $7000. The guy has lots of money and just wants to buy. So, is that manipulation or is that not? It is hard to define.”