Binance is currently the largest trading volume bitcoin and cryptocurrency exchange on the market. However, your competitors seem to have found a strategy with which they could beat you: comply with regulations.
It seems that this condition has sparked the interest of its closest competitors such as the Gemini platform, founded by twins Cameron and Tyler Winklevoss.
According to an article published by Bloomberg on July 12, 2021, Cameron highlighted the importance of complying with the requirements of regulatory bodies, to the point of pointing out that his cryptocurrency exchange is “playing the long game.”
We are trying to be the fastest turtle in the race. The game pays off over time.
Cameron Winklevoss, founder of the Gemini exchange.
Parallel to this opinion, at the end of June 2021, the control body in the United Kingdom, known as the Financial Conduct Authority (FCA, for its acronym in English), prohibited Binance from carrying out – without its authorization from any financial authority – Activities that require regulation in the country, such as the trading of cryptocurrency derivatives, as reported by CriptoNoticias.
The United States news agency also recalled that the authorities of the current United States government, specifically the Department of Justice, the Internal Revenue Service and the Commodity Futures Trading Commission, they opened new investigations to inquire about business aspects of Binance.
We take our legal obligations very seriously and continue to invest in our compliance program. That includes building robust systems to detect money laundering and hiring former government officials to advise her on regulatory and compliance matters.
In this regard, Cameron Winklevoss assured that Gemini collaborated with the creation of the virtual Commodity Association, whose purpose is to eradicate bad behavior and prevent fraud and manipulation.
Despite this, Binance continues to occupy the first places when it comes to buying and selling cryptocurrencies. Your daily spot trading volume is more than 100 times that of Gemini, according to data provided by CoinMarketCap.
“We are playing the long game,” said Cameron Winklevoss.
Exchanges may be in good standing with US regulators.
The Bloomberg researchers came to the following conclusion: the strategy for US cryptocurrency exchanges to be on good terms with regulators is easy; just don’t offer more regulated productssuch as derivatives contracts based on cryptocurrencies.
They also warn that they must be careful with the cryptocurrencies to offer, especially if watchdogs decide that a currency is really just a way to sell an investment in a business while circumventing regulations. By this, they specifically refer to security tokens.
In addition, they point out that compliance with the rules opens the doors for institutional investors to use trading platforms and their custody services.
The authors explain that, with all these developments, the competitive environment of cryptocurrency exchanges can change quickly. This, taking into account that greater regulation would help market participants in the United States to take up business from offshore operators faster, specifically with regard to decentralized finance (DeFI).
They also consider that this technology has allowed developers to establish cryptocurrency exchanges that operate on computer code. Through this, users can exchange assets without the intervention of an intermediary.
Lastly, the Bloomberg article pointed out that, day after day, in the hope of achieving rule-setting by Washington, the Gemini exchange is shedding a US-centric model and is gaining ground abroad. In this regard, Cameron Winklevoss said: “One thing that is clear, the American landscape is moving at a very slow pace. The United States will get there, but we can’t wait for that. “