Binance Seeks Investment From Sovereign Wealth Funds to Soften Tough Regulators

Highlights

  • Binance has faced mounting pressure from governments worldwide aiming to restrict its business through regulatory pressure
  • These regulations have pushed Binance to seek investment from sovereign wealth funds in order to garner favour from governments and regulators
  • Some regulators, including the UK’s Financial Conduct Authority have claimed Binance has failed to provide basic information

It’s been a tough year for Binance. While the crypto exchange has seen record evaluations on the back of an increased appetite for cryptocurrency this year, Binance has had to navigate its business through increased regulations across the world.

These regulations have forced Binance to seek investment from sovereign wealth funds to garner favour from governments that have previously tried to impose restrictions on the crypto exchange.

Binance’s Regulation Woes

Binance has faced mounting pressure from governments all around the world, aiming to restrict its business through regulatory pressure.

In an interview with the Financial Times, CEO of Binance, Changpeng “CZ” Zhao, said Binance is currently in talks with sovereign wealth funds about them investing in the Binance exchange, as it seeks to build trust with governments as well as offset aggressive regulators. Moreover, Zhao said that Binance’s global entity was in talks to raise capital for its US affiliate ahead of a public listing. Zhao would not disclose which funds the company was in discussions with.

Binance has had a tough time with worldwide regulators, including in the UK, Hong Kong, South Africa and Canada, which have banned Binance from operating or expressed regulatory controls.

In June, the UK’s Financial Conduct Authority (FCA) barred the firm from conducting any business in the country.

In US, Regulators at the Commodity Futures Trading Commission are investigating Binance for suspected market manipulation and insider trading.

There are also regulation issues facing Binance from China, Japan, South Korea, Malaysia and Thailand, Germany and the EU.

Binance Hits Back With Letter of “Fundamental Rights”

In an attempt to get out in front of its regulation issues, last week, Binance released a letter containing a ten-point list of “fundamental rights”, ranging from the philosophical to the practical.

Outlined in the letter, it says that access to financial tools and privacy are human rights and that everyone should be able have access to tools that help them gain “economic independence”.

Zhou also said that Binance actually wants regulation to be more clear in the crypto space.

Mixed Signals

Despite Zhou’s public call for clearer regulation, some regulators, including the UK’s Financial Conduct Authority have claimed Binance has failed to provide basic information such as trading names and the functions of its global entities.

This has meant that regulators have been left in the dark about the crypto exchange’s business functions – something they need to be able to supervise to grant a secure business space.

Is Binance a Good Investment?

While Binance may be going through some regulatory woes at the moment, that doesn’t mean that it’s not a massively successful crypto exchange.

Binance Coin (BNB), which governs the Binance exchange has seen massive year-to-date growth of more than 1,500%.

Not to mention it’s the third ranked crypto by market capitalisation behind Ethereum (ETH) and Bitcoin (BTC).

When you consider the possibility of a Binance IPO, this project is still worth considering a look.

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