US Crypto Exchanges Believe Regulatory Oversight Could Help Them Surpass Binance
Cryptocurrencies have grown exponentially in the last six months. However, the regulation of platforms that offer exposure to them is behind.
Regulatory Oversight Set To Pay Off
According to a Bloomberg Crypto report, regulation seems to be catching up with certain areas of the crypto universe. Government authorities are paying close attention to platforms that offer crypto services.
Even though previously, crypto exchanges operated without any oversight from authorities, the narrative seems to be shifting. The first indication is the UK's Financial Conduct Authority (FCA) which has banned the world's largest crypto exchange by trading volume from operating in its territories.
Following this development, US authorities are also reportedly taking a closer look into the business practices of Seychelles-based Binance Holdings Ltd with the Internal Revenue Services, Commodity Futures Trading Commission, and the US Department of Justice launching separate investigations into the centralized exchange.
This seemingly unfortunate event has tipped the scale in favor of several US exchanges.
These centralized exchanges are Coinbase Global, Gemini, Kraken, and Bittrex, which offer crypto custodial services to US customers. According to Gemini co-founder Cameron Winklevoss, these exchanges play a long-term game in the crypto trading dominance, given that Asian exchanges have continued to rule the burgeoning crypto industry.
“We’re trying to be the fastest tortoise in the race. The long game pays off over time,” Cameron added.
The Gemini crypto exchange sees this as an opportunity, given that it is a regulated entity.
Other US-based crypto exchanges have also come under regulatory oversight to attract institutional investors, hedge funds, and family offices. Coinbase Global is a publicly-traded company and has its shares listed on Nasdaq. Kraken has a regulated bank charter license in Wyoming, while Gemini helped create the Virtual Commodity Association in 2018 as a watchdog in the rapidly expanding crypto space.
Binance Leads The Pack For A While Yet
Even though Binance has generated little in value from its US subsidiary, its daily spot trading volume is reportedly 100 times that of the Gemini exchange, according to Coinmarketcap. It also offers the most exposure to crypto-assets due to its rapid system of listing hot coins. This contrasts with Coinbase, which only listed Dogecoin this June after the meme token became a major hit earlier this year.
Meanwhile, centralized exchanges may not be the only threat to authorities. According to Bloomberg, the booming decentralized finance (DeFi) sub-sector may present a greater challenge. This is because platforms that offer access to these financial services do not observe know-your-customer (KYC) protocols and are largely decentralized with no central authority.