What is Binance doing in terms of compliance, transparency, and industry in the winter of 2022?

Macro market down cycle for enterprises is an exercise. Small and medium-sized enterprises need to survive this experience, reduce costs and increase efficiency. Cash-rich companies can capture territory in bear markets and plan strategically for the coming bull market.

The same is true in the highly cyclical crypto market. Over the years, there have been countless stories about how crypto startups survived the cold winter and captured the attention of the entire industry during the bull market. But few have explored how companies that have already done so well are positioned for bear markets.

When it comes to successful crypto companies, Binance should be one of them. It went from being the world's largest trading platform in less than a year. Perhaps we need to look at Binance's actions and what he's doing right in the crypto winter of 2022.

Binance Asia-Europe compliance, Binance.US is expected to operate in all 50 states

In the early days of the crypto industry, companies and practitioners either intentionally or unintentionally sidestepped regulatory rules and pursued rapid growth first. The recent bull market, however, has made the industry realize that at this stage the benefits of compliance will be far greater than in the past. Compliance can bring more incremental gains to the industry, and the time window for wild growth has closed.

Starting in 2022, Binance embarked on a path to global compliance.

In the first half of the year, Binance received a Class IV license in Bahrain, a full regulatory license for a virtual Asset (VA) trading platform in Dubai, a cryptocurrency regulatory license in the first and second largest cities of the UAE, and an approved registration license in France and Italy.

Of course, due to the different cultures and regulatory styles in different parts of the world, Binance is constantly communicating and cooperating with each other to deal with the regulatory situation from different parts of the world. On May 25, Zhao Changpeng and his delegation met with Kazakh President Kassym-Jomart Tokayev and other officials. Binance signed a memorandum of understanding with the Ministry of Digital Development, Innovation and Aerospace Industry of the Republic of Kazakhstan. Then, on August 15, Binance officially announced that it had received approval in principle from the Astana Financial Services Authority (AFSA) of Kazakhstan to operate a digital asset trading facility and provide custody services at the Astana International Financial Center (AIFC). On October 6, AFSA announced that Binance received a permanent license to operate as a digital asset platform and provide hosting services on the AIFC.

In the second half of this year, Binance was granted Virtual Asset Service Provider (VASP) status by the Central Bank of Spain, Financial Service provider status in New Zealand, and crypto Asset Service Provider registration license in Cyprus.

At the same time, Binance also acquired 100% of Sakura Exchange BitCoin (SEBC), a Japanese crypto asset trading platform service provider, which officially entered the Japanese market and is regulated by the Japanese Financial Services Agency (JFSA). Binance's 2020 investment in Tokocrypto, a cryptocurrency trading platform approved by Indonesia's Commodity Futures Trading regulator (Bappebti), was also recently acquired by Binance 100%.

Binance.US has also achieved remarkable results. It was licensed in 46 states in the first half of 2022 and is expected to be compliant in all 50 states in the near future.

Confront FUD with openness and transparency

In 2022, in addition to the crypto industry itself entering a bear market, two other events happened to hurt the crypto industry. Terra Thunder, which peaked at $40 billion, and FTX, a trading platform, have lost more than $8 billion by embezzling user assets. The former led to the liquidity crisis of the Three Arrows capital, which was once regarded as the top VC, directly or indirectly led to a number of enterprises suffering from mass innovation. The latter affected millions of users around the world and bankrupted several companies.

In the crypto industry, which advocates decentralization, openness and transparency, the arbitrary appropriation of user assets by platforms and even the use of transactions has surprised most users. This has also led to industry-wide FUD (fear, hesitation, and doubt) among users. Whether the platform has enough reserves to satisfy users' withdrawal has become the focus of every user.

To this end, Binance has developed the Merkle Tree Reserve Certificate (PoR) to prove that it can redeem the user's assets.According to the latest certificate on December 22, Binance's current customer net balance is 24.83 million BNBS, 499,300 BTCS, 4.33 million ETH, etc., with a value of more than $20 billion. The asset liability ratio of the nine tokens disclosed so far is all over 100%. Users can also use their personal account code for verification through the Merkle tree.

In fact, Binance launched a $1 billion Investor Protection Fund (SAFU) back in July 2018 to keep its users' assets safe. According to the latest official disclosure of two SAFU addresses, the fund currently holds 1.23 million BNBS, 300 million BusDs and 16,200 BCTS.

Proof of reserve and protection funds are more of a Binance strategy for giving users confidence and a defensive end. In the face of cryptocurrency crime, Binance has assembled a team of professional hunters.

Chagri Poyraz joined Binance in January 2022 as Director of Sanctions Compliance. Chagri has extensive experience in anti-money laundering (AML) and sanctions compliance, where she was responsible for Coupang, Korea's largest online shopping platform. And then, Seth Levy, former head of global oversight at Citadel, a $35 billion multinational hedge fund; Steven McWhirter, who has nine years of experience at the Financial Conduct Authority and 12 years at the Gaming Commission; and former U.S. Solicitor General for the Northern District of California Joshua Eaton and Nils Andersen-Red, a crypto asset specialist at Europol's Cyber Crime Centre (EC3) Dark Web team, have also joined Binance's compliance team.

Binance's security and compliance team grew by 500% in 2022, responding to more than 47,000 law enforcement requests, according to the company's most recent disclosure.

BUILD for incremental markets

In the last upcycle, people who have been in the crypto industry for many years have predicted that the existing landscape may be close to solidifying. Need to expand the market, break the circle, for the industry to bring incremental is possible to obtain better development.

In early 2022, Binance officially announced to join forces with the Confederation of African Football (CAF) to become an official sponsor of the 2021 TotalEnergies African Nations Cup (AFCON). Binance then partnered with Argentina's Football Association (AFA), one of the biggest football federations, as its main sponsor, and later became the exclusive cryptocurrency sponsor of Brazil's first division. In June, Binance signed an exclusive NFT licensing deal with Portuguese football legend Cristiano Ronaldo to collaborate on a collection of NFT collectibles.

Binance not only works extensively with sporting events, but also focuses on the entertainment industry.

YG Entertainment, a Korean entertainment company that owns Kpop stars such as BIG BANG, BLACKPINK and WINNER, as well as Korean entertainment companies that manage massive IP such as EXO, Red Velvet, NCT and aespa, and SM Brand Korea Marketing has entered into a strategic partnership with Binance. The two sides will have deep cooperation in the meta-universe, games, fan economy and other aspects.

In April, Binance signed a partnership with the National Academy of Recording Arts and Sciences, becoming the first official crypto trading platform partner ever. In June, innovative artist The Weeknd, who has won three Grammy Awards and been nominated for an Academy Award for Best Original Song, teamed up with Binance for the world's first Web3 tour, "After Hours Til Dawn." In late June, TikTok blogger Khaby Lame became Binance's global brand ambassador, and Khaby will be doing Web3 science on TikTok. Khaby has over 140 million followers on TikTok and over 2.3 billion likes. As James Rothwell, vice president of marketing at Binance, noted, Khaby's charm and humor helped popularize Web3.

Of course, Binance is probably aware that it may only be able to get short-term traffic by breaking the circle. The long-term growth of the industry requires a more professional team to address the regulatory, compliance, political and social issues crypto assets face around the world. Binance uses its influence and resources to create a global advisory board.

From the perspective of team members, including former regulatory leaders and industry leaders from various countries, Such as Max Baucus, former U.S. Ambassador to China and former Chairman of the Senate Finance Committee, Ibukun Awosika, the first female chairman of the First Bank of Nigeria, HyungRin Bang, adviser to the Presidential Council of South Korea, Managing Partner of Cathay Capital, and former Minister of Finance of France Bruno Bezard and so on.

In December, Binance announced that it had joined the US Digital Chamber of Commerce to support the development of a regulatory framework for crypto assets. Both sides will work together with other industry participants to promote the development of the blockchain industry.The announcement follows Binance's launch of the Industry Recovery Program (IRI) with industry leaders to promote user protection and rebuild the industry, as well as to provide investment channels for organizations supporting Web3's growth. Binance expects IRI to last six months and spend at least $1 billion on IRI themed investment opportunities.

Looking back to 2022, Binance itself is focused on driving compliance and transparency around the world. From an industry perspective, Binance breaks through cross-industry cooperation to increase industry growth. Binance has also created a global advisory board and joined the US Digital Chamber of Commerce, which could lead to further efforts to establish industry standards. Perhaps, when the industry standard is established, the entire crypto industry will usher in a more orderly and sound development.

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