Blockchain

Binance CEO CZ: Stricter Regulations in Asia Will Lead to Consolidation of Crypto Exchanges

The fragmentation of the Asian market has brought about more rigorous scrutiny from financial regulations and this has led to a consolidation of many cryptocurrency exchanges according to a report on Wednesday.

The report cited a decline in the number of Mergers and Acquisitions by 76% in 2019 and a good number of these transactions had involved exchanges and payment services. While the number of deals conducted in the US fell by 40%, those conducted in Asia rose from 14% to 22%.

Binance leading the way

Binance, the world’s largest cryptocurrency exchanges, acquired nine crypto-related firms last year and has recently completed the purchase of leading data provider, CoinMarketCap. The exchange is not slowing down in its buying spree and looking forward to more mergers and acquisitions. 

In a comment, the CEO of Binance, Changpeng Zhao (CZ) said, “in Asia, we are interested in exchanges that have existing bank relationships which enable them to accept trading in local fiat currencies.”

The executives of some exchanges acknowledged that cases of money laundering, terrorist financing, and security threats could heighten the level of scrutiny by regulators.

CZ added that the implementation of stricter anti-money-laundering rules in the industry, which Singapore and Hong Kong have done, will lead to a subsequent increase in regulatory requirements. This will result in consolidation as most smaller exchanges may not be able to meet up with the requirements.

Binance is not the only exchange expanding to Asian markets. In January, Gojek, a top Indonesian platform operator, bought a stake in Coins.ph, a Philippine-based cryptocurrency wallet operator, for $72 million.

This increase in the number of mergers and acquisitions in recent times is reportedly brought about by the spike in trading of Bitcoin (BTC) and other cryptocurrencies despite the March sell-off.

Zhao, whose company made about $180 million net profit in Q4 2019 said, “We usually spend about a quarter of our profits on investment opportunities every year as we grow our portfolio of businesses beyond just trading.”

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Source: https://coinfomania.com/binance-stricter-regulations-asia-crypto-exchange/?utm_source=rss&utm_medium=rss&utm_campaign=binance-stricter-regulations-asia-crypto-exchange