Three Arrows Capital CEO Says Crypto Investors Trust Binance the Most Due to Easier Regulations
According to the recent statement by the Three Arrows Capital hedge fund's CEO, Su Zhu, the largest crypto exchange in the world, Binance, is also the most trusted one among investors. Zhu believes this to be an interesting thing, considering the fact that Binance is so lightly regulated when compared to many other exchanges.
Zhu's comment on Binance's popularity was inspired by a poll run by a small crypto exchange known as Beaxy.
Interesting that @binance, a lightly regulated exchange, has also become the most trusted crypto exchange among actual users. You cant build trust by acquiring govt licenses/rubber stamps. https://t.co/1OXkskgHAr
— Su Zhu (@zhusu) December 23, 2018
The poll, posted on December 19th, simply asked the community which exchange do they trust most. The voters were also asked to provide a reason in the comments section, if they have one. The offered exchanges included Coinbase, Binance, Bitmex, and OKEx. Binance has won with a majority of voices, having as much as 63% of voters choose it as the most trustworthy exchange.
The second place is held by Coinbase, which has less than half of Binance's votes. Only 31% of voters think that Coinbase is the safest exchange around. Even so, barely any of 11,581 voters opted to choose Bitmex (4%) or OKEx (2%).
While the results are interesting, many have started commenting on Zhu's statement, and speculating whether or not Binance is lightly regulated.
Lawmakers around the world tend to be very strict with regulations on cryptocurrencies, as well as anything else related to the financial industry. The reason for this is simply their desire to prevent the illegal use of assets, such as money laundering or funding terrorist groups.
Despite the fact that Binance only focuses on crypto-to-crypto trading, it still operates several fiat-to-crypto exchanges, such as the one in Uganda. Another one is expected to be launched in Singapore relatively soon, with the support of local financial authorities, as well as Singaporean government itself.
While Binance itself might be described as lightly regulated when compared to US-based exchanges, this is not the case when it comes to its fiat-to-crypto exchanges. In fact, those are said to be just as strict and tightly regulated as those in South Korea, Japan, or even the US itself. Malta's crypto-friendly regulations were quite beneficial for Binance, although it still has some strict financial regulations due to the fact that it is an EU nation.
Binance itself focuses on investor protection and security, and it remains the top exchange in the world. It is also one of only a handful of large exchanges that never suffered a security breach or a hacking attack since their creation. This may be one of the reasons why investors trust Binance, as the exchange proved to be security-focused and safe.
Meanwhile, Binance's CEO, Changpeng Zhao, frequently posts any updates regarding the exchange. This includes all potential announcements, changes, and more, which is further proof of transparency and openness that crypto exchanges should strive for.
Furthermore, the exchange decided to partner up with Chainalysis, which is a company that analyzes blockchain data and traces wallets and transactions suspected of being tied to criminal activities. Binance did it voluntarily, without regulatory pressure.
Is There A Need For Stricter Regulations?
Strict policies were brought in order to ensure the protection of investors and their funds, although these rules are meant to serve as short-term solutions. They can include transaction monitoring, AML and KYC systems, and higher levels of security. However, a real, long-term solution would be to lead crypto exchanges to acknowledge their responsibilities.
As exchange services, it is in their interest to prevent the usage of digital assets in illegal operations. They should also have strong management systems, and if they meet these requirements, it is possible for them to receive a self-regulatory status.