Binance Recovers, Makes New Deals to Enter India and United Arab Emirates
Despite prior legal battles, Binance achieves regulatory compliance in India and Dubai. New leadership is bringing confidence to the once-beleaguered giant.
Although Binance, one of the world’s leading digital asset exchanges, has recently suffered legal troubles in multiple countries, the firm has received the green light to conduct business operations in two growing markets: India and Dubai.
Binance has been entangled in a series of legal problems throughout the past several months. In addition to a major lawsuit from the US Department of Justice (DoJ) that saw the company punished with a multi-billion dollar fine and the removal of its CEO, Binance’s platform has also been blocked in several countries. A particularly dramatic episode was in the case of Nigeria, where two executives were detained on money laundering charges; one of these executives managed to elude his guards on a trip to a nearby mosque, and fled the country. Considering that Nigeria is one of the world’s largest countries by population, Binance’s ejection from this market seems like a particularly harsh blow.
Nevertheless, despite these setbacks, Binance has taken several key steps to recover its lost ground. It was first ejected from the Republic of India in January 2024, after the country’s Financial Intelligence Unit (FIU) became aware that the company had not officially registered with them and was not compliant with regulations for exchanges. By flouting these regulations, Binance was able to avoid a controversial 30% tax on digital assets, and as a result, Indians flocked to it; local media reported that a mind-boggling 90% of Indian nationals’ digital asset holdings were kept with Binance. Binance was not the only exchange hit with this punishment from the FIU, but it was undoubtedly the largest.
However, although local media also quoted an anonymous official as saying that “there is no room for negotiations, and no global powerhouse can command special treatment, especially at the cost of exposing the country’s financial system to vulnerabilities”, the Indian government has imposed a surprisingly light penalty on the company. In addition to undertaking reforms to achieve compliance with FIU regulations and registration, Binance has been asked to pay a $2 million fine to recover the Indian market. Obviously, considering that the United States government imposed a fine of more than $4.3 billion in recent court cases, this deal is a no-brainer. Binance’s official re-opening in India has not yet been finalized, but the main breakthrough has apparently been achieved.
India is not the only country to make a reconciliation with Binance, however. Chengpeng Zhao (CZ), the former CEO, was born in China and largely grew up in Canada; in addition to citizenship to these two countries, he also holds a passport for the United Arab Emirates (UAE). Over the course of his legal troubles in 2023, he even attempted to travel to the country, but his request was denied. It seems particularly curious, then, that the UAE’s government apparently made a Virtual Asset Service Provider (VASP) license conditional on CZ’s departure from positions of authority.
Bloomberg reported on April 18 that Binance was awarded the VASP license to operate in Dubai after becoming compliant with a series of regulations. The report went on to state that the government's final request was for CZ to cede voting control over Binance’s Dubai-based subsidiary. Despite CZ’s Emirati citizenship, Bloomberg’s sources claimed that “officials wanted to ensure that Dubai didn’t diverge from the agreement Binance reached with US authorities, under which Zhao was forced to relinquish his CEO position”. Binance did end up receiving the VASP license, and that same day, the company’s Twitter account announced that Binance Blockchain Week would be hosted in Dubai this year, explicitly in celebration of this deal.
Still, despite the company’s success, Binance’s current CEO, Richard Teng, apparently lambasted the existence of a tit-for-tat deal like this. Although he did not explicitly deny that such a trade took place, he claimed that rumors of the deal were “pure speculation. Again, we don't comment on media speculation... Our relationship, our dealings with regulators are confidential." There are obvious reasons for Binance to play down alleged connections between itself and possible criminal activities, but the license has certainly been issued. In any event, CZ himself doesn’t seem to have taken the entire episode too personally. Binance co-founder Ye Hi was actually in Dubai when he claimed that CZ is “in a good situation”, with his legal standing “largely peaceful”. Whatever his legal troubles, they have not prevented him from breezily joining online discussions about the impending Bitcoin halving. This rejection has evidently neither hurt CZ’s own spirits nor discouraged his co-founder from attending business conferences in the country.
It seems that there are several reasons for CZ to be taking his personal setbacks so well. Although he no longer has decision-making power over the company he founded, he still profits from its successes, and those successes are growing. India is a growing crypto market with over 1 billion citizens, and Binance has previously accounted for 90% of their Bitcoin holdings. A lead like that won’t disappear after a few months of being out of commission. Dubai, on the other hand, is one of the richest cities in the world, and has a documented interest in the digital asset space as a way to diversify their holdings. Both of these countries have huge opportunities to expand the business worldwide.
These two new markets for Binance are not the only signs of their growing confidence, however. The company announced a new program for coordinating consumer incentives and early access rewards, titled “Megadrop”, promising airdrops, quests, and other rewards for its users. Although the cost of this program has not been revealed, its early advertisements have all emphasized its long-term payouts compared to several competing services, all pointing to a sense of overall stability. Additionally, even though Binance’s trading volume stumbled in late 2023, the company published data showing that its lead over the other centralized exchanges was gaining.
A recovery for Binance would undoubtedly be beneficial for Bitcoin as a whole. The wider space is not quite as entangled with the major exchanges as in the collapses of prior giants like FTX or Mt. Gox, and a total implosion for Binance would hardly mean a cascading series of failures for Bitcoiners worldwide. Nevertheless, Binance is an international giant in the world of exchanges, and the wider community was unsure what the company’s future would hold after several simultaneous legal fights. The new leadership, however, has announced two major deals on the same day, and Bitcoin’s position over all other digital assets rose accordingly.
It wouldn’t be fair, of course, to entirely credit Binance for this decision, as the halving has certainly played an outsized influence in bitcoin’s situation. Binance even turned away from bitcoin slightly, replacing it with USDC in their recovery fund. Still, as the halving gets closer and closer, it’s only a good thing that Binance has shored up its own position. Binance is on a new track, one aiming to reassure regulators worldwide that they’re ready to cooperate as a fully legitimate operation. Bitcoin is enjoying a new phase of acceptance from the financial establishment worldwide, and its reputation as an outsider is disappearing in the rear-view mirror. In these circumstances, it’s fitting that Binance is pursuing wholehearted compliance in several jurisdictions and seeing major benefits from it. The halving will put us in a new era for Bitcoin, and it’s best to meet it with a sincere commitment to cooperation.
THE BIGGEST CELEBRATION IN BITCOIN
THE BITCOIN HALVING LIVESTREAM BEGINS AT BLOCK HEIGHT 839,979 ⤵️
If you liked this content please give a like and share! Comment below with your reactions to this post and any recommendations for future topics.
Thank you for reading Bitcoin Magazine Pro™, we sincerely appreciate your support!
 |
|