Following intense regulatory scrutiny, crypto exchange Binance has increased their compliance efforts, reducing maximum leverage on offer to traders, as well as suspending margin borrowing for several cryptocurrencies.
The world’s largest cryptocurrency exchange has been the target of regulatory authorities over the past several months, with regulators around the world cracking down on the exchange. UK regulators recently stopped Binance from undertaking any regulated activity in the UK, however British citizens are still able to access Binance’s services through other jurisdictions.
Binance has been facing a number of restrictions in various countries including Germany and Japan, as well as the U.K. and has released a series of statements to announce various company updates. The most recent of which will see Binance suspending users from margin borrowing.
“From Aug. 10, Binance will suspend margin borrowing for bitcoin, ether and other large cryptocurrencies and their Australian dollar, euro and sterling pairs”
As part of their efforts to work with regulators and ensure compliance, Binance is having to adapt to the changing crypto landscape, particularly as they make the transition to a regulated financial service. At the annual blockchain virtual summit REDeFiNE TOMORROW 2021, the CEO of Binance Changpeng Zhao commented on the shift that Binance is prepared to take in order to stay on the right side of regulators:
“It’s clear that heavy regulations should be expected. Binance is in the mindset of shifting from a tech startup to a financial service. We are increasing compliance efforts, including hiring ex-regulators”
As one of the largest exchanges in the crypto market, Binance has faced considerably more scrutiny than other exchanges, perhaps in part due to the exchanges global presence, and concerns by regulators that Binance’s platform is being used by cybercriminals. Sceptics have suggested that Binance is merely being used as a ‘scapegoat’ for global regulators to tighten cryptocurrency regulations around the world.
With Binance facing increased pressure from regulators, the CEO Changppeng Zhao also announced via twitter that it was limiting the maximum leverage for trading cryptocurrency futures for new users to 20 times the money a user puts up from 100.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
