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Binance is headed by Changpeng Zhao, a Canadian known as “CZ.” The exchange offers a wide range of services to users around the world, from cryptocurrency cash and derivatives trading to non-fungible loans and tokens. In July, its trading volumes totaled $455 million, down nearly a third from the previous month amid a cooling of crypto-currency markets, but it remains the global No. 1, according to data from CryptoCompare.
Binance also leads in cryptocurrency derivatives trading, with volumes exceeding $1.4 trillion in July, representing a 55 percent share of the overall market. Binance is led by Changpeng Zhao, a Canadian known as “CZ.” The exchange offers a wide range of services to users around the world, from crypto-currency cash and derivatives trading to non-fungible loans and tokens. It operates a “decentralized” exchange that allows users to trade directly with each other. Its own cryptocurrency, Binance Coin, is the third-largest in the world, with $68 billion in circulation.
Binance’s corporate structure is opaque. Its holding company is registered in the Cayman Islands, according to British court documents and Malaysia’s securities regulator.
On Monday, the Dutch central bank said Binance was not in compliance with anti-money laundering and anti-terrorist financing laws. The warning affects Binance Holdings Ltd. as well as other Binance entities that provide cryptocurrency-related services to residents of the Netherlands.
A DNB spokesperson told local newspaper De Telegraaf that the central bank is likely to take action against Binance, though it did not provide further details.
If the Dutch central bank does indeed take drastic action against Binance, it would certainly be in the same vein as the decisions of Malaysia’s financial services regulator, which literally asked Binance to disable its website and social networks in the country.
A Geneva-based company has also taken on the crypto giant. Liti Capital is investing 5 million to fund a legal case in which Binance customers are suing the trading platform. They blame it for not being able to place trades on May 19, in the midst of the cryptocurrency plunge, thereby incurring heavy losses.
Binance is also reportedly under investigation by the Department of Justice and the U.S. Internal Revenue Service.
The platform said it takes its compliance obligations very seriously and is committed to meeting all regulatory requirements wherever it operates. Binance does not release financial data, so it’s hard to say whether this has had an impact on its business.
Still, the exchange has taken several notable steps as a result of the regulatory pressure. Last month, Binance CEO Zhao said he wanted to improve relations with regulators. He said the exchange would seek their approval and establish regional headquarters. Binance has also narrowed down some of its crypto product lineup that could come under scrutiny by regulators. Last month, it announced it would scale back its futures and derivatives business in Europe, with users in Germany, Italy, and the Netherlands the first to be affected. It also restricted derivatives trading by users in Hong Kong, saying the move was “consistent with our commitment to compliance.”