Cryptocurrency meltdown: “The sector is not going away,” Binance chief asserts

Malgré l’effondrement du marché des cryptomonnaies, “le secteur ne va pas disparaître”, assuré à l’AFP le patron de Binance, la principale plateforme d’échange de cryptoactifs au monde, lors d’un entretien en marge du salon VivaTech In Paris.

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Crypto billionaire Changpeng Zhao, one of the most listened-to voices in this environment, at the head of a group of 120 million customers, asserted that the current crisis “is creating fears, but we expected it, it’s not unusual.”

“The financial markets go up and down. If it gets announced, you can’t expect it to last forever,” said the 44-year-old businessman, who has the Binance logo tattooed on his right arm.

After a good run during the pandemic, cryptocurrencies, which are known for their volatility, have fallen sharply in recent weeks, as they suffer from a drop in investors’ appetite for risk.

The market briefly plunged below $1 trillion on Tuesday as bitcoin, the king of virtual “currencies”, tumbled nearly 70% from its all-time high last November.

Despite these headwinds, Binance, which has nearly 6,000 employees, has opened 2,000 jobs the company expects to fill by the end of the year.

“We were very economical” when the market was going up, explained that person known only by his initials, CZ.

“We didn’t spend much on advertising, we didn’t mention stadiums, we weren’t Super Bowl partners,” he said, referring to the choices of some of his rivals.

Despite its popularity in recent years, the use of cryptocurrencies by some politicians is still associated with fraudulent practices such as money laundering, a rhetoric that Czechoslovakia calls a “complete myth.”

The leader, who grew up in China before moving to Canada and obtaining citizenship, insists that the blockchain technology, which secures cryptocurrency transactions, ensures transparency and traceability.

He insists that “with a large amount of data, it is possible to find out who has such an address with a high level of reliability”.

For this reason, “most criminals do not use blockchain” to commit their crimes because it is a “very bad tool” for them, he continues.

According to a study conducted by Chainanalysis, only 0.15% of cryptocurrency transactions in 2021 were linked to illicit addresses, which is significantly lower than traditional bank transfers.

However, crypto-asset regulation is a major topic, in the US as well as in Europe, where authorities are tightening the screws to improve regulation of a still-new market.

“In my view, this will be a multi-stage process that will take decades,” commented CZ, who noted that Binance has hired former heads of regulators.

The platform is particularly ambitious in France.

In early May, it obtained its registration from the Financial Markets Authority (AMF) to be able to exercise a “decisive step” according to Czechoslovakia.

France wants to attract this industry. It sends a very strong message internationally,” the entrepreneur insisted.

The mandate as a “digital asset service provider” is the group’s first in Europe, with UK authorities ruling last year that Binance’s activities could not be properly supervised and posed a risk to consumers.

In France, where it employs a hundred employees, the platform has set up its headquarters in Montrouge, in the Paris region, and recently moved to the campus to start up Station F in Paris.

The group also recently appointed AMF’s former Deputy Director of Legal Affairs Stéphanie Cabossioras.

In response to a question by AFP, the authority confirmed that Ms. Kapucioras did not have to manage the registration procedure on Binance in France, dismissing any suspicion of conflict of interest.

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