Binance urges balanced regulatory approach for crypto to ensure innovation, growth are not stifled
Binance believes that the core principles of any cryptocurrency regulatory framework should be consumer protection, market integrity, and financial stability.
The exchange issued a statement in its response To the recent consultations initiated by the UK Treasury regarding the regulation of crypto-assets.
Binance said regulators need to take a balanced approach to regulating the crypto industry so that it can continue to grow and innovate in a highly competitive environment.
The exchange said “disproportionate regulation” could ultimately lead consumers to turn to markets and operators that are not bound by these rules, leading to financial stability issues. Added.
“Same Risks, Same Regulatory Consequences”
Binance said it agrees that cryptocurrency financial services activities should be properly defined and regulated. However, the regulatory regime should ensure that it does not affect the non-financial activities underlying crypto-assets.
Exchanges believe that crypto assets that carry similar risks to other traditional financial assets should be treated in the same way under the regime, and that oversight bodies like the FCA should establish frameworks and “consistent” rules. He said that he should guarantee that he would create it.
The exchange added that regulators also need to take into account the fact that “new technologies will change the balance of risks” related to “clearing, settlement, auditability, transparency and governance”.
Additionally, the rules should consider the “nuances” of different crypto assets and adapt regulation to accommodate these assets and their underlying technology.
Binance also said the administration needs to create “practical” rules for cryptocurrency disclosure to ensure consumers have access to “correct information.”
Exchanges should be responsible for the listing and delisting process of new cryptocurrencies and conduct the necessary due diligence on issuers. As such, the exchange is also responsible for breaches and revocations.
The exchange supports the introduction of an appropriate regulatory framework for entry, adding that it believes market abuse will decrease once these rules are in place and there is “greater scrutiny” of the market.
According to Binance, the Treasury Department needs to carefully and clearly define DeFi in its regulatory regime as the “future development” of DeFi is uncertain.
The exchange said DeFi impacts the market “differently” than traditional financial services and has its own risks and benefits.
Binance added that DeFi will continue to evolve rapidly and disrupt the market in new ways, which should be properly considered when drafting industry laws and policies.
Binance encourages a balanced regulatory approach to cryptocurrencies to ensure innovation and unhindered growth.