Binances late search for accommodation

Binance, the world's largest cryptocurrency exchange, is a sensitive business. It has no headquarters. This is no coincidence. Such connections usually bring regulatory requirements and the risk of growing dogs when something goes wrong. The British financial supervisory authority came to the conclusion that Binance's failure to answer fundamental questions was one reason that it was impossible to monitor it.

If we can believe Binance, your peripatetic attitude will change, as will her unruly attitude towards regulation. It is ready to announce its global headquarters. The CEO Changpeng "CZ" Zhao is in conversations with watch dogs from Singapore via France to Dubai - where he has just become homeowners. The company recently published a manifesto, which means that regulation is "inevitable". This is allegedly a welcome change to six months ago when Binance largely met the supervisory authorities around the world with a shrug. As part of the attempted rapprochement of Binance (in which a new head of communication is also involved), Zhao claims that Binance advertises great investments by sovereign funds.

It is difficult to separate courage from reality in the cryptosphere. Binance is reluctant to see which SWFS are on your dance card and has neither gave details on how far discussions have progressed, nor about the type of investment. Healthy skepticism is required. But at first glance, SWFS as an experienced investor Binance can force transparency that has so far been difficult to grasp.

A lot will depend on which SWF may invest. The choice of Binance's headquarters is just as important; The two can be intertwined. Zhao's logic seems to be that the support from a state fund will of course lead a country's regulatory authority to be more open -minded. This is not absurd in some legal systems. Nor is the idea that a SWF could invest in Binance that states that it will record a daily transaction volume of $ 170 billion.

Singapore, where Zhao (at least temporarily) lives, is certainly a candidate, both for investments and for Binance's homeland. Singapore wants to be seen as a crypto -friendly jurisdiction. While the Monetary Authority of Singapore is not a pushover - it has led Binance.com on alert, even though it has left the company's local website alone - the regulatory authority is innovative and examines a possible digital central bank currency.

In the meantime, Singapore's asset fund GIC and the country's investment giant Temasek are happy to invest in crypto exchanges. Temasek was part of several blue chip investors who invested $ 420 million in FTX. A Temasek-owned fund already supported the Singapore branch by Binance, which is now led by a former MAS officer. SWFS are set to potential returns from stock exchanges, the value of which is bound to the increasing price of Bitcoin. The reservation is the risk of regulation for business models. In particular for exchanges on which the real world and the cryptosphere overlap, the risk is acute: guard dogs are rightly concerned about the sheer number of armchair investors who could lose their shirts, and to wash the possibility of criminals, illegally acquired profits.

Connections to an established market like Singapore can calm the regulatory authorities elsewhere. It would be less welcome if Binance bought into a easier jurisdiction in which it could carry the imprimature of a local license without revising compliance to continue to spread products around the world. As long as the settings of the countries to crypto vary greatly, the arbitrage will remain. Zhao is right that regulation comes and that it can protect users without suffocating the innovation. But the inedible probability is that it will be slow and handling, especially for a company that is as relaxed as Binance.