Binance Chooses Paris As Regional Hub In Europe Tech Tribune France

The company said it would make Paris its European hub after the French financial markets regulator officially granted Binance the right to offer and market its services to local customers. Binance operates a worldwide trading website, but has long operated without official headquarters and registration in many countries.

This decision is a response to pressure from regulators in several countries to formalize its status. The exchange operated in France before registration but could not advertise its services.

“Early cryptocurrency adopters are fine with using an unlicensed offshore exchange,” Changpeng Zhao, founder and CEO of Binance, said in an interview. “But if we want to achieve mass adoption, most mass users will prefer a licensed and regulated exchange,” he added.

Binance was established in 2017 in China by Mr. Zhao, a Chinese native who moved to Canada as a teenager. Two months after Binance was founded, China banned crypto exchanges, forcing Mr. Zhao and his team to move to Japan. In 2018, they left Japan after the country’s financial regulator said the company was unlicensed. From then on, Binance stopped disclosing a specific location.

Binance is the largest crypto exchange in the world by volume, surpassing the likes of Coinbase Global and FTX. Binance processed an average of some $62 billion in bitcoin, ether and other digital currencies every day of the year through March, according to data provider CryptoCompare.

Zhao previously called the offices and headquarters outdated. Zhao said France is a good European hub for Binance because of its size, the strength of the regulator, and what he calls a pro-business mindset.

“Having a G-7 country with a strict regulator sends a very strong signal to other countries,” Zhao said.

He is based in Dubai, but will spend the summer in Paris, where he has rented an apartment. Binance recently received licenses to operate in Bahrain and Dubai. It plans to make the latter a regional hub.

Binance will expand an existing office of 50 people in Paris, bringing in key engineers and technicians and recruiting up to 250 people.

Photo:
Vincent Isore/Zuma Press

He said the company is focusing on a remote-first strategy, with regional headquarters rather than a main headquarters. Binance has 5,000 employees. It will expand an existing office of 50 people in Paris, integrating key engineers and technicians and recruiting up to 250 people.

It took over a year and a half for Binance to receive registration approval in France, where regulators reviewed its know-your-customer policies and anti-money laundering protocols. The French financial regulator, known by its acronym AMF, on Wednesday added Binance to its list of registered digital asset service providers.

Zhao said the registration will make it easier for him to access banking and payment services, since traditional financial service providers generally do not deal with unlicensed entities.

He said he met French President Emmanuel Macron at the Élysée Palace for about 15 minutes last November. The meeting was with Mr Macron’s chief of staff, but Mr Macron unexpectedly joined halfway, saying he wanted to grow the French economy and attract innovative industries, the chief said from Binance.

A French government spokesperson did not immediately respond to a request for comment.

Mr Macron, a former investment banker, has pledged to make France a start-up, part of an effort to make Paris a European tech hub rivaling London. France has attracted bankers from the British capital after the UK voted to leave the European Union in 2016 by offering tax incentives and opening more international schools for expat families.

Mr. Zhao said that France did not offer any sweeteners and Binance did not ask. Last year, the exchange pledged to invest some $100 million in France to support the development of cryptographic technology and granted $2 million for the restoration of a hall in the Palace of Versailles.

US authorities have been closely monitoring Binance’s US operations.

The Wall Street Journal reported in November that the Department of Justice was investigating whether Binance had encouraged money laundering. The Securities and Exchange Commission, meanwhile, sent a subpoena to Binance.US in late 2020, asking a wide range of questions about its operations.

More recently, the SEC, as part of its investigation, looked into the relationship between Binance.US and two exchange-traded market makers with ties to Mr. Zhao, the Journal reported.

Zhao said he would not comment on Binance’s talks with regulators.

Binance’s push to become more regulated comes as governments embrace the burgeoning cryptocurrency industry, which has quickly transformed from a fad into a serious business processing hundreds of billions of dollars a day.

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In the UK, where the financial regulator said last year that the local Binance unit was not allowed to conduct certain operations, the government recently said it wanted to make the country a global crypto technology hub. -assets. In the United States, regulators have been looking at how they can put cryptocurrency exchanges under their watch to protect users. Binance operates in the United States through a subsidiary, Binance.US.

“The mood has definitely changed very dramatically even in the past two months,” Zhao said. “A lot of people took a skeptical view before, but now they’re like, OK, we have to embrace this thing.”

Write to Patricia Kowsmann at patricia.kowsmann@wsj.com and Caitlin Ostroff at caitlin.ostroff@wsj.com

WSJ’s Dion Rabouin explains why Wall Street is now betting big on crypto and what that means for the new asset class and its future. Photo composition: Elizabeth Smelov

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Binance Chooses Paris As Regional Hub In Europe Tech Tribune France


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