At the heart of cryptocurrencies is decentralization, cutting out middlemen and allowing users to manage their own money. With decentralization being the very goal of digital assets, it’s no wonder that regulation doesn’t seem to have a place in this industry. Although this view is popular among cryptocurrency users, history has proven this view to be short-sighted.
Buying a less understood asset class that exists in the “Wild West” does little for investor confidence. Subsequently, as the value of cryptocurrency assets continued to grow, the media was quick to highlight the number of scams, insider trading, and market manipulation, including but not limited to limited to pump-and-dump schemes.
These risks are in addition to the less obvious ones, such as the reliability of an online exchange or the possibility that interest-paying platforms will go bankrupt. These concerns can be resolved through regulation, and even the most skeptical investors may be willing to dive into cryptocurrencies.
Currently, industry leaders like Binance, one of the largest cryptocurrency exchanges in the world, has set itself the goal of addressing growing regulatory concerns. Speaking about the importance of regulation, Binance CEO, better known as CZ, urge users to compare the regulation of cryptocurrencies to that of a car.
“When the car was first invented, there were no traffic laws, traffic lights or even seat belts. Laws and guidelines were developed as cars rolled down the road.
Recognizing the value of regulation, it’s no surprise that Binance has made it part of its commitment to keep users safe as they navigate the crypto sphere. By practicing what they preach, the exchange remains aligned with all regulatory requirements, even before regulators enforce these measures.
Safekeeping of SAFU funds
One such initiative was that Binance was one of the first cryptocurrency exchanges to maintain a Secure Assets Emergency Fund (SAFU). The fund, valued at $1 billion at the end of January 2022, is made up of a percentage of all trading fees that occur on the platform, providing a measure of security for all platform users.
Other notable efforts include partnering with several law enforcement agencies that identify bad actors and hold them accountable for their actions. When it comes to partnerships, the exchange has turned to companies such as CipherTrance, a platform known for automating Anti-Money Laundering (AML) cryptocurrency compliance through the use of API , as part of their growing efforts. AML audits are also conducted by the team, a number of which have already been validated.
Their commitment doesn’t stop with these regulations, as Binance recently expanded its compliance team. With a 500% increase over the previous year, many former FATF executives have joined the ranks to ensure the team complies with all applicable local rules where they operate.
Where compliance pays off
Leading by example has proven beneficial for Binance, which has since shared promising updates with its community in response to its efforts. On December 21, 2021, the Binance team shared the signing of a Memorandum of Understanding, or Memorandum of Understanding, with the Dubai World Trade Center Authority (DWTCA), defining the creation of an industry hub for virtual assets. global. By signing this MoU, Dubai, with the help of Binance, demonstrates its commitment to long-term economic growth attributed to digital innovation.
On December 27, 2021, the Binance team shared additional news announcing the receipt of approval in principle from the Central Bank of Bahrain (CBB), making the Binance exchange the first regulator in the MENA region.
Together, these announcements signify the much loftier mission of increasing cryptocurrency adoption as a whole. While analysts believe that the world is still in the early adoption phase, with the remaining 95% of people looking for a regulated and licensed exchange with a local presence, it seems Binance’s efforts are a clear step in the right direction. good direction.
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