Binance has reigned supreme for years, but UK warnings, Japanese rebukes, Thai regulatory action, Ontario bootings, and Indian probes have many wondering how the world’s top crypto exchange stayed on top despite ejection from every country it lands in.
This is the story of Binance: the ethereal blockchain entity that never stops moving.
Chief exec Changpeng Zhao initially co-founded Binance in Hong Kong back in July 2017 alongside chief marketing officer Yi He.
Both execs are originally from China, but Zhao spent many of his formative years in Canada.
The exchange’s Hong Kong affair disintegrated almost instantly due to potential actions from Beijing. By September 2017 — less than three months into its existence — Binance had moved to greener pastures in Japan.
Notable is that news organizations continued to report Binance was headquartered in Hong Kong nearly two years after its departure. Outsourced opacity seems a convenient consequence of doing business as a crypto exchange.
Japan also wasn’t a match made in heaven. Six months later — after warning from Japanese regulators — Zhao and compatriots made the executive decision to sail off to the faraway, bountiful shores of Malta.
Or did they?
For the next year or so, Zhao consistently sang Malta’s praises and even virtually welcomed other crypto entrepreneurs as they entered the country.
Binance signed a memorandum of understanding with the Malta Stock Exchange in September 2018 to apparently cement its relationship with the Mediterranean island nation.
But by 2020, Maltese regulators made it clear that Binance “is not authorised by the Maltese Financial Services Authority (MFSA) to operate in the cryptocurrency sphere and is therefore not subject to regulatory oversight by the MFSA.”
Binance never acquired proper licensing in Malta over those two years, according to CoinDesk.
During this vague, odd, and awkward happenstance, The Block in 2019 shared details of a police raid on the company’s supposed Shanghai office.
Zhao threatenened to sue over the outlet’s report — though no lawsuit ever materialized.
Around the same time, Binance set up a series of separate exchanges based in numerous countries and offshore tax centers, including (but not limited to): Uganda, the US, Singapore, Jersey, and Turkey.
Binance has since shuttered its Ugandan and Jersey entities, with the firm’s Singapore operation now under investigation by local regulators.
Lastly, the exchange landed in the Cayman Islands: the renowned bastion of money laundering and tax evasion.
Well, the Caymans is also doing everything in its power to disassociate from the notorious crypto platform.
What laws actually apply to Binance?
In 2019, Binance listed Singapore’s Small Claims Tribunal and International Arbitration Centre under its arbitration section of its flagship exchange’s terms of service.
Strangely, to kickstart arbitration with Binance one had to mail Binance Europe Services Limited located in Malta (where the company was never licensed to operate, said Maltese regulators).
In 2020, its Maltese address (where users were to send arbitration claims) was scrubbed from Binance’s terms of service — replaced with an email address.
Later on, all official arbiters and addresses were silently removed altogether.
Finally, as of today all legal proceedings must go through the Hong Kong International Arbitration Centre, according to Binance’s own terms of service.
This means Binance is right back where it started: Hong Kong.
So, will history repeat and force Binance to immediately move out of its original home on return? The world is watching.