Binance is one of the largest crypto exchanges in the world. Its founder, Changpeng Zhao (also known as CZ), recently gave an exclusive interview to Fortune magazine. In it, he reveals how crypto restrictions in China prompted him to found Binance overseas.
The Anti-Crypto Regime in China: A Dated History
Despite its interest in blockchain and the CBDC, China remains extremely hostile to cryptocurrency. The proof, the use of this digital asset is still strictly prohibited. In 2013, the Chinese authorities prohibited any form of crypto transaction with banks. In 2017, they closed many crypto exchanges.
Faced with this repression, CZ and his team had to consider other options in order to develop Binance. “The decision to leave China was not easy. I loved living and working in this country. But I understood that the crypto restrictions were going to get worse and that would have an impact on the development of Binance”CZ said during his interview.
The story behind the success of CZ and Binance
After leaving China, CZ decides to set up Binance in Japan. Admittedly, the Japanese administration shows a more favorable attitude towards cryptocurrency. Nevertheless, the crypto exchange has always faced many regulatory problems. Rather than comply with Japan’s crypto regulations, CZ prefers to move Binance to Malta in 2018. Today, the crypto exchange operates without a headquarters.
Justifying his decisions, CZ said: “It’s not so much that we want to bend the rules or even avoid them, we just want to look for more favorable places.” An approach often criticized by some regulators and members of the crypto community.
Currently, Binance is among the largest crypto exchanges (with a market capitalization of over $100 billion). These regulatory problems and these debacles with Justice are however still relevant. We know in particular that CZ and Binance are currently the target of a class action.
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