Jul 26, 2023

Binance plans to introduce its full service in Japan in August, CEO Changpeng "CZ" Zhao said Tuesday.

Video transcript

Bin, they plan to reenter Japan in August. This is made possible by the exchanges, purchase of regulated exchange, secura exchange Bitcoin all while the firm withdraws its German crypto license application. I feel like Binance has been doing a little bit of a regulatory dance in which countries they're deciding to operate in and which ones they are deciding to pull out from. Will I will toss this off to you. What do you make of these Binance headlines this morning? I think we don't. Oh, there's will, uh, I can take it from here, uh, to start with, uh, if that's ok. So, uh, you know, we're seeing, we're seeing Binance pulling out of the German market or rather stopping its attempt to get back into that market at the same time as it's, uh, going right back into the Japanese market that it left 222 years ago. Oh, sorry. We're having technical difficulties. Are we good? All right, we're gonna, we're gonna keep moving forward. So it's not so much a decision of buying as to whether it should or shouldn't play as it is the regulator's decision in Germany. It seems to have read the writing on the wall and decided, well, we're not gonna make it through here just like in, uh, now Belgium and the Netherlands and Austria, we're gonna stop applying for this license and get out of dodge before the regulator tells us to hit the road. And, whereas in Japan, after two years of non-compliance or being on the sideline, Binance has succeeded in getting back into that market after getting the proper regulatory clearance. So will I'll throw it over to you? What's your take? Ok, I'm here now. I think we have some audio problems but we're going now, apologies for that, Danny. Uh Yeah, no, Binance is making moves. So we have this announcement with Japan. We'll talk about the one in Germany in a second Japan news, of course, is huge. Japan is one of the largest economies in the world and the fact that it's been very difficult for Binance to enter into that area after the two year hiatus. Uh just speaks to the fact that the Japanese regulators have taken crypto very seriously. Uh huge anecdote here within this realm is FDA Japan when it was forced to wind down with the shutter of FTX Global, all the users of FX, Japan got their money out, right. Uh They just easily liquidated it, everything was done correctly and securely for users. So no one took any losses that's compared to a lot of the other FTX uh global institutions that were out there. And the FDX US and FDX International, which are still going through the Chapter 11 proceedings, people are crossing their fingers that they get 10 cents on the dollar. And I think that just speaks to how Japan has taken regulation very seriously. Uh They are focused on reserves, they are focused on making sure that everyone who comes into, into Japan into the digital asset sector does register with the, with the government. So they have a face to the business that's operating here. Finance had to pull out two years ago and now they're going to be able to step in by purchasing another exchange. And this is a pretty common tactic, right where you maybe don't want to go through like all the heaps, uh all the hurdles and leaps to be able to get into a new jurisdiction. So you go and purchase someone who already has all the licensing and then you just replace the business entirely with your own. And that's what it looks like here. Pretty smart move. I don't know if we brought up the Germany news, but I might just bring it up anyways, which is Germany or the Binance is pulling out of Germany after deciding that it doesn't want to licensing with Baffin Germany's financial provider. This of course follows after their decision to move out of both the Netherlands and a few other countries within Europe. Uh due to stricter licensing regimes in those countries, Jen, I think Bin's lawyers are very, very hard at work here trying to navigate of course, the lawsuit in the US but also figuring out where they can operate without being struck down by the financial regulators. There. Um There are some comments in the article on Germany that said the situation both in the global market and regulation has changed significantly. Binance still intends to apply for appropriate licensing in Germany, but it is essential that our submission accurately reflects these changes. I feel like there are some strategic decisions being made here will just like you mentioned, you know, the acquisition of a firm that's already regulated in Japan is a nice way for Binance to continue operating in some way, shape or form in the country. And I think that, you know, there's a lot of weighing of the pros and cons of staying in certain countries and leaving certain countries or staying on the sidelines and waiting to see what regulators are going to do in certain jurisdictions. I think it's important to note in June CZ said that France will remain the flagship center in Europe for Finance and that's despite the money laundering probe that's going on there. Um I think that's kind of indicative of how exchanges might be looking at the European Union under new regulation that's coming out. Of course, once there's new regulation in the eu in 2024 exchanges or firms will just need one license to operate across the entire block. Which I think will be interesting. I think we're going to see. Um, maybe, maybe even more exchanges flocked to Europe and try, try and get license there. But that's my take on Binance. You know, they're still keeping their head above water despite these, these headlines that come out with them, I would say, like, you know, on a weekly basis now, more than a weekly basis. Danny, any final words here. Yeah, it's definitely a lot of headlines that you don't want to see if you're an exchange operator. But you know, in the German market specifically for those who are already in the door, they seem to be getting a little more bullish just yesterday. Coin base announced that it would uh list a number of tokens include, including ABIs token and Helium's Token in Germany for its German customers. You know, that's not a game changing business decision, but it does indicate that their lawyers and their teams have decided that in the environment in Germany is as well enough for them to move ahead with these token listings. So they're trying to capitalize on this market that Binance has decided it, it can't play in. So we are seeing this reshuffling globally. It makes you wonder if coin base can and will grow to the point that Binance plays where it really is the uh the, the keeper of the gates, the gatekeeper, if you will for uh uh global crypto volumes. I don't know if we'll get there any time soon, but I'm sure that Brian Armstrong would like that mantle.

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