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Binance CEO: Regulatory clarity will help crypto adoption

Binance Founder and CEO Changpeng Zhao believes clear regulations will help accelerate crypto adoption.

“Having regulatory clarity will actually ease adoption,” Zhao, the chief of the world’s largest cryptocurrency exchange, told Yahoo Finance LIVE in an exclusive interview. “I think for the mainstream users, 95% of users that are not in crypto yet, having regulation will ease them into crypto.”

Zhao wrote in an op-ed published on Yahoo Finance that “while some in the industry might say that working to advance regulation goes against the ethos of cryptocurrency and blockchain, I would argue that a stable regulatory environment can only support innovation and is essential to establishing trust in the industry, leading to long-term growth.”

ROME, ITALY - MAY 10: Founder and CEO of Binance Changpeng Zhao, commonly known as
ROME, ITALY - MAY 10: Founder and CEO of Binance Changpeng Zhao, commonly known as "CZ", attends the "CZ meets Italy" at Palazzo Brancaccio on May 10, 2022 in Rome, Italy. Changpeng Zhao is the founder and CEO of Binance, the world's largest cryptocurrency exchange by trading volume as of April 2018. (Photo by Antonio Masiello/Getty Images)

When asked whether Binance is in talks with the Securities and Exchange Commission to register, Zhao said Binance is talking with many officials.

“[Binance] is talking with all regulators at the same time,” said Zhao. “I don't know the specific details of those dialogues.”

At the same time, Zhao said he believes classifying all of cryptocurrencies as securities is “a bit simplistic,” countering arguments made by some government officials.

“I think that's a more of a simplistic view, very similar to the early day of the internet,” Zhao said. “People ask is the internet a radio, a magazine, or something else? It is a magazine, radio, and many other things. I don’t think we can look at this as one asset class.”

Zhao noted there are many different types of cryptocurrencies with some resembling currencies and others coming closer to other asset types.

“We could clearly point to many different tokens that are not securities,” he said.

U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler, testifies before the Senate Banking, Housing and Urban Affairs Committee during an oversight hearing on Capitol Hill in Washington, U.S., September 15, 2022. REUTERS/Evelyn Hockstein
U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler, testifies before the Senate Banking, Housing and Urban Affairs Committee during an oversight hearing on Capitol Hill in Washington, U.S., September 15, 2022. REUTERS/Evelyn Hockstein

SEC Chair Gary Gensler has repeatedly implored crypto firms to register proactively with the agency, saying the “vast majority” of cryptocurrencies are securities based on how tokens are used with the expectation of generating profits. That means many crypto intermediaries — including exchanges and broker dealers — are transacting in securities and have to register with the SEC in some capacity, according to Gensler.

Zhao’s comments come as cryptocurrencies remain in a slump, with many — Zhao included — calling the pullback a crypto winter. As the Federal Reserve raises rates, crypto has sold off with the stock market, a correlation Zhao calls “counterintuitive.”

“I guess today, most crypto traders are also stock traders so when the stock market tanks and they want to hold cash, the crypto market goes with it,” he says. “In theory, they should be inversely, correlated but we haven't seen that yet. I think it will take a couple of years to see that.”

Jennifer Schonberger covers the Federal Reserve, policy, and cryptocurrencies for Yahoo Finance. Follow her at @Jenniferisms.

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