Binance founder Changpeng “CZ” Zhao has asserted that the exchange’s application for a Markets in Crypto-Assets (MiCA) license in Greece was fully compliant and nearing approval from at least one European Union regulator. He stated that political intervention ultimately led to the withdrawal of the application last week. Zhao made these remarks during the debut episode of “The Starting Block,” a new daily program hosted by Gareth Jenkinson, head of multimedia at The Block.
Key Takeaways
- Binance’s MiCA license application in Greece was reportedly compliant and close to approval before political interference prompted its withdrawal.
- CZ expressed difficulty in fully understanding Strategy’s STRC preferred stock product, describing it as “over-engineered.”
- Zhao confirmed a $500 million investment in Elon Musk’s Twitter (now X) acquisition and discussed potential partnership opportunities with X Money.
- Binance founder disclosed $2 million in donations to Prison Professors, a nonprofit assisting incarcerated individuals with reentry.
According to Zhao, two EU countries expressed interest in approving Binance’s application, leading to a competitive situation. However, he indicated that “other forces” opposed the approval. While speculation has pointed to European Central Bank President Christine Lagarde as a potential influence in blocking the application, Zhao did not directly confirm or deny this, stating he had seen similar information online without direct documentary evidence from Binance.
Binance formally withdrew its Greek MiCA application last week and indicated plans to seek authorization in another EU member state. Co-CEO Richard Teng affirmed the company’s commitment to obtaining a license within the coming months. The EU’s deadline for unlicensed crypto firms to cease operations is July 1, with Spanish regulators confirming no exceptions will be granted.
Zhao characterized the outcome as a detrimental situation for both Binance and Europe, citing a parallel with Binance’s prior regulatory experiences in Japan and Singapore. He noted that in Japan, after initial regulatory warnings, Binance eventually secured a full license, while in Singapore, a withdrawal preceded the collapse of FTX.
Regulatory Precedent and the EU Framework
The circumstances surrounding Binance’s MiCA application withdrawal in Greece could set a significant regulatory precedent within the European Union. The MiCA framework, designed to harmonize crypto-asset regulations across member states, aims to provide legal certainty and consumer protection. However, Zhao’s account suggests that political considerations or inter-state competition may override the established application process. This raises questions about the uniformity and predictability of regulatory enforcement within the EU. Should other exchanges encounter similar obstacles, it could lead to a more cautious approach to seeking licenses within the bloc, potentially benefiting jurisdictions with clearer or more welcoming regulatory environments. The situation also highlights the ongoing tension between national interests and the overarching goals of EU-wide regulatory harmonization, particularly for large, globally operating entities like Binance.
Zhao also shared his perspective on Strategy’s STRC preferred stock, admitting he struggled to fully comprehend the product despite multiple attempts. He described many financial products as overly complex and “over-engineered.” He pointed out the inherent tension in using Bitcoin as collateral for leveraged instruments, given Bitcoin’s volatility despite its long-term appreciation potential. While expressing reservations about the product’s complexity, Zhao emphasized that he does not question the integrity of Strategy Executive Chairman Michael Saylor, whom he described as a reputable “Bitcoin die-hard.”
Furthermore, Zhao disclosed that he has made four $500,000 donations, totaling $2 million, to Prison Professors, a nonprofit organization led by his prison consultant Michael Santos. The organization aids incarcerated individuals in preparing for re-entry. Zhao also confirmed an investment of approximately $500 million in Elon Musk’s acquisition of Twitter (now X), citing his support for the platform as a voice for free speech. He mentioned an inquiry to Musk about Binance partnering with X Money, but was informed that the service would initially avoid cryptocurrency integration.
Source: : www.theblock.co