In a recent interview, the Binance chief executive admitted that the best way forward in terms of regulatory compliance was to set up a centralised base

Binance, the world’s leading digital assets platform in terms of volume of daily trades, has revealed prospects of setting up a permanent address. This address will be the center of operations and other activities for the firm. Changpeng Zhao, CEO, recently stated that Binance was a centralised exchange and needed to maintain a centralised structure in order to have a good relationship to regulators.

He left it up to speculation about the exact site where the exchange will be based.

“… We have realized that we need a centralised entity in order to collaborate with regulators. We need to have clear records of stakeholders’ ownership, transparency and risk controls,” he said to the South China Morning Post.

A centralised exchange must be registered in all countries it operates. Binance has not been able to do this, as it has taken on a decentralised nature, despite being a centralised platform for digital assets. This has caused a number of problems with different regulatory authorities around the world, including in the UK.

Zhao pointed out in an interview that regulators may have thought the exchange was suspect because of the decentralised operation model.

The regulators asked us where our headquarters are.

“Regulators ask us, ‘Where’s your headquarters?'” We respond, ‘Well, we don’t have headquarters. This is not a good idea for regulators. They don’t know how we can work together. Sometimes they even think we are dodgy obviously,” he said.

Although establishing an official address for the exchange could make it subject to certain regulatory requirements, it is a requirement if Binance wishes to negotiate with regulators. Zhao recognized the necessity to make this shift.

To have a centralized exchange business we must be centralized. It is necessary to have a central entity with clear investors, transparent KYC/AML procedures and strong risk controls. “

Zhao mentioned that central bank-backed digital currencies could help increase cryptocurrency adoption.

Despite its recent troubles, Binance is trying to re-establish itself. This goal could be achieved by Binance’s re-evaluation its relationship with regulators. If it comes to fruition, the new development will be added to the existing KYC requirements for new customers, leverage limits review and the hiring Greg Monahan (an ex-IRS officer) to help with anti-money laundering efforts.

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