The crypto exchange Binance has announced that it will no longer offer derivatives trading in the Hong Kong Special Administrative Region with immediate effect. CEO Changpeng Zhao speaks of "proactive compliance".
Binance wants to act proactively - not just react
Someone wanted to get ahead of the authorities: As the crypto exchange Binance announced today (Friday), it will no longer offer trading in crypto futures and options to users in Hong Kong. Effective immediately, new users based in Hong Kong will no longer be able to open accounts with Binance to trade crypto derivatives. Existing users will be given a 90-day window to close their open positions. It has not yet been said when this window will apply.
The exchange in a statement:
"AS A MARKET LEADER, BINANCE IS CONSTANTLY EVALUATING ITS PRODUCT AND SERVICE OFFERING. WE WILL PROVIDE HONG KONG USERS WITH RESPECT TO DERIVATIVE PRODUCTS (INCLUDING ALL FUTURES, OPTIONS, MARGIN PRODUCTS AND LEVERAGED TOKENS) RESTRICT IN LINE WITH OUR COMMITMENT TO COMPLIANCE.
"BINANCE WILL BE THE FIRST MAJOR CRYPTOCURRENCY AND DIGITAL ASSET EXCHANGE TO PROACTIVELY RESTRICT ACCESS TO DERIVATIVES FOR HONG KONG USERS.
Binance CEO Changpeng "CZ" Zhao seizes the attention of the hour and hints at further changes of this kind. On Twitter, he writes to his 3.1 million followers
"BINANCE IS SWITCHING FROM REACTIVE COMPLIANCE TO PROACTIVE COMPLIANCE. STAY TUNED."
CZ: Regulation makes crypto 'essential'
Likely meant by this: Instead of being whistled down week after week by regulators, the world's largest exchange by volume is now taking action on its own and "regulating" itself in a kind of anticipatory obedience. Zhao had already emphasised in an open letter a few weeks ago that he considers regulation "a positive sign".
"I BELIEVE THAT A WELL-DEVELOPED LEGAL AND REGULATORY FRAMEWORK WILL BE A SOLID FOUNDATION IN THE LONG RUN, MAKING CRYPTO TRULY INDISPENSABLE IN EVERYONE'S DAILY LIFE."
For the crypto industry to continue to grow, the development of standards is crucial, he said. CZ:
AND BINANCE WANTS TO MAKE A POSITIVE CONTRIBUTION."
To this end, the exchange says it has, for example, expanded its international compliance team and advisory board by 500% since 2020. It said it would continue its efforts to work with regulators to "address their concerns". It knows that, together with the industry as a whole, it is "at a turning point".
He also said that the cessation of derivatives trading was done in the spirit of the broader crypto industry:
"OUR GOAL IS TO CREATE A SUSTAINABLE ECOSYSTEM AROUND BLOCKCHAIN TECHNOLOGY AND DIGITAL ASSETS, AND WE HOPE THAT THESE EFFORTS WILL CONTRIBUTE TO THE LONG-TERM GROWTH OF THE INDUSTRY IN THE LOCAL MARKET."
The Binance token Binance Coin (BNB) has had little reaction to the news so far, with the price gaining 1.8% within 24 hours.