Binance Quits Blockchain Association
Binance.US, is the American arm of the world’s largest crypto exchange by trading volume. The entity has recently announced that it is leaving the Blockchain Association after less than two years. The primary reason for this appears to be disagreements over the group’s strategy toward regulatory engagement.
As one of the largest and most influential members of the association, Binance.US’ departure is a big blow. The Blockchain Association is a lobbying group that represents the interests of the crypto industry in Washington D.C. It counts some of the biggest names in the space among its members, including Coinbase, Circle, Digital Currency Group, and Paradigm.
The association has been quite active lately, recently hiring a new president and opening up a political action committee (PAC). The Blockchain Association recently expanded operations some more into New York state as part of a major push for crypto regulations lobbying in the U.S. statehouses.
Binance.US joined the lobbying group in August 2020. It’s unclear why Binance has decided to leave the Blockchain Association as the company has not given any reason for its decision to leave the group.
Binance was banned from operating in the U.S. in 2019, but the company relaunched its U.S. exchange, Binance.US, in September 2020. The launch was quite rocky as the exchange had to delist several popular cryptocurrencies including XRP, Cardano (ADA), Stellar (XLM), and Tron (TRX) due to regulatory issues. Since its launch, Binance.US has continued to attract legal scrutiny, including a Commodity Futures Trading Commission probe into alleged unlawful derivatives trading.
The commodity futures trading commission probe is currently ongoing, and it’s not clear what role, if any, the blockchain association played in Binance’s decision to leave the group. The organization has been generally supportive of cryptocurrency regulation efforts in the U.S., but it’s possible that Binance felt it was no longer aligned with the group’s mission.
Binance has not commented on its decision to leave the blockchain association. However, the move comes as Binance is facing increased scrutiny from regulators around the world. In March, Japanese authorities raided the offices of Binance’s Tokyo-based partner Z Corporation over allegations that the exchange was operating without a proper license. And last month, Binance came under fire from the Securities and Exchange Commission (SEC) for allegedly allowing U.S. investors to trade on its platform without registering with the regulator.
It’s also worth noting that Binance is not the only cryptocurrency company to have recently left a blockchain lobbying group. In March, Circle announced that it was leaving the Blockchain Association over disagreements on how the group should approach regulatory issues. And last month, Ethereum co-founder Vitalik Buterin criticized the association for being too cozy with regulators.
It will remain interesting to follow the developments around Binance.US next step.