As Crypto Exchange Binance Undergoing Elevated Regulatory Scrutiny Overall Appeal of Crypto Exchanges Look Questionable

The world’s most geographically diverse crypto exchange Binance has been struggling for its full legitimacy for a long time. Now multiple sources said that Binance is considering obtaining investment and protection from government funds at a valuation of $200 billion. Singapore jurisdiction is one of the most likely options.

Why does this crypto exchange need such considerable funding now? Most likely this is due to the fact that the exchange is now under strong pressure from regulators, who issue various penalties on it, up to and including a ban on operating in a particular country.

Accordingly, this brings certain losses to the company and irritates clients and investors. This is especially disliked by investors who even refuse to carry out the next round of financing. Of course, this malaise cannot but worry the representatives of the crypto exchange. Therefore, this is the main reason why the platform is looking for all possible ways to get additional funding.

Interestingly, Binance Singapore announced that Richard Teng will be its appointed CEO. Previously, he served as Director of Corporate Finance at the Monetary Authority of Singapore for 13 years. Perhaps this is due to the fact that analysts assume that Singapore will be the country that will provide $ 200 billion in investments for the company.

Also, as we recently wrote, Binance hired a former IRS criminal investigator, Greg Monahan, to oversee investigations into money laundering, according to an announcement from the company. Monahan’s official title is announced as Global Money Laundering Reporting Officer. Probably, not coincidentally, Wu Blockchain wrote in its Twitter that “the Chinese community found that Binance resumed the registration of Chinese mobile phone numbers after suspending for two weeks”. The industry is apparently getting stronger and more legitimate by day.

U.S. Treasury Secretary Janet Yellen and European Central Bank President Christine Lagarde were among those this year to voice concerns over crypto money laundering, with other regulators growing concerned with Binance in particular. Apparently, in response to this, Binance users will have to complete a verification process to access its products and services, it said on its website. Those who have not done so will only be able to withdraw funds, cancel orders and close positions.

Many large platforms, including Coinbase Global Inc (COIN) and Gemini, also require users to submit ID documents, yet Kraken, another U.S. exchange, only requires personal information for limited access to trades.

According to a recent Reuters article, Binance CEO Changpeng Zhao said in a tweet linking to the Binance announcement that "actions speak louder than words". "We aim to work more collaboratively with policy-makers to improve global standards and discourage bad actors". From the ordinary portfolio investors’ perspective, crypto exchanges’ looming overregulation - despite the U.S. Treasury Janet Yellen’s urge not to overdo with these kinds of efforts – is making them less attractive compared with numerous lower profile crypto wallets and other similar crypto utility platforms. Regulators seem to exaggerate roles of the crypto exchanges in the crypto transfers. It looks like shares of crypto exchanges in total volume of cryptocurrency transactions, as a result, will be gradually diminishing.