Binance Blockchain Week is currently taking place in Paris and on this occasion, we met Stéphanie Cabossioras, legal director of Binance France. She did us the honor of answering our questions, in particular on the activities of Binance in France, the contributions of the exchange in the definition of the regulatory framework applicable to cryptocurrencies in Europe. In addition, she returned to the issues of the Know Your Customer (KYC) policy for centralized exchange platforms.
You work as a legal director at Binance. Can you introduce yourself and tell us about your missions within this company?
Within Binance France, I have three main missions. First of all, I take care of all the legal part: registrations, approvals, and more broadly, the life of the company. Then, I am also in charge of compliance management. This is to ensure that Binance France meets its regulatory obligations under the regulations to which it is subject. Finally, I am also in charge of public affairs, that is to say maintaining relations with our partners, whether professional associations or public authorities. This work has become particularly demanding since Binance France obtained the PSAN registration on May 4th. Insofar as now Binance is regulated in France and therefore must apply the regulations on the fight against money laundering which is the same as all those subject to this type of regulation. In addition, before arriving at Binance, I was deputy legal director at the Autorité des marchés financiers (AMF) where I worked for 5 years.
Were you already in the cryptocurrency world before or was it a discovery when you arrived at Binance?
In reality, because of my background, I haven’t had many opportunities to come into contact with it. Cryptoassets, I really discovered them at the AMF, where I worked on the construction of the legal framework relating to digital assets in France, following the request of some industry players. Together, we had worked to build regulations that were both protective of investors and at the same time competitive for France in an environment that at the time was not regulated at the international level.
What are Binance’s goals in France?
In France, Binance has three major objectives. The first is to fulfill all our obligations within the framework of the PSAN approval. This approval is extremely important because it confirms that we comply with anti-money laundering regulations. But above all, it allows us to make suspicious transaction reports when we identify potentially criminal transactions and report them to public authorities.
The second objective is to anticipate the entry into force of the European MiCA regulation, which will come into force in two years. In France, we are fortunate to be able to prepare for this thanks to the PSAN accreditation. This will make it easier to obtain European approval and above all to acquire a passport throughout Europe. That is to say to have a single entity and to be able to offer services across the continent. Currently, companies are obliged to apply for PSAN approval in all 27 EU member states. [Ce qui n’est pas très pratique].
The third point consists more broadly of obtaining all the authorizations that we need in Europe to be able to offer our full range of activities.
Doesn’t the fact that Binance can monitor all transactions go against the privacy of its users?
This is part of the requirements of the regulations on the fight against money laundering and the financing of terrorism. This requires the identification of customers through KYC. In France there are regulations and like all entities subject to them, Binance must comply with them. It is an obligation if we want to reach the French public. It should be noted that Binance was the first major international platform to obtain PSAN registration in France. This also testifies to a great sense of responsibility.
When you require your users to provide their personal data as part of KYC, aren’t you betting on centralization? Knowing also that bitcoin (BTC) was originally created precisely to anonymize transactions and be able to trade from anywhere with anyone….
There are two opposing logics. On the one hand centralization with centralized platforms and on the other hand decentralization with decentralized finance. At this stage, French and European regulations concerning crypto-assets only concern centralized platforms. The objective of all these regulatory provisions is twofold. First, we have the fight against money laundering and the financing of terrorism, which is probably a noble cause. Afterwards, if it involves a certain number of compromises, I think it is worth it. The second objective is the protection of investors with, among other things, greater transparency in terms of information. And there, I believe that everyone is in favor of it. Moreover, I think it is also a prerequisite for the widespread adoption of cryptoassets.
It seems that governments are struggling to master the environment around decentralized finance (DeFi). To the extent that they would start thinking about a possible regulation of this industry, would Binance support them, especially in terms of education?
We are always ready to work with the authorities, to support them, to give them our opinion on regulatory texts, etc. I think that collaboration with the public authorities is an excellent guarantee for having good regulations.
Regarding decentralized finance in particular, we are trying to work with the ecosystem, with professional associations to launch a mass initiative in France. In the past, the French ecosystem has been ahead of the rest of European ecosystems. He had started thinking about regulation a little before the others. Consequently, when the European authorities wanted to regulate this sector, they were naturally inspired by France.
It worked with the PSAN regime, from which MiCA was largely inspired, and the European regulation on the pilot regime on blockchain market infrastructures, which is inspired by an AMF report dating from March 2020 on the application of financial regulations to blockchain market infrastructures. We see that in France, we have an added value on the regulation which has worked twice on the blockchain. In this case because we have involved and competent actors.
I wish there was something similar on decentralized finance. We are thinking about it with the other players in the sector and we would like to produce a report on what DeFi is for professionals and make proposals for regulation. The aim being that when the European institutions want to go in this direction, we can propose something balanced. The strength of France is that the ecosystem is capable of working jointly with the public authorities.
How Binance users reacted to the shutdown future in France ?
All I can say is that Binance is currently working very actively to relaunch this service and ensure that users have access to all of Binance’s products.
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