Binance has provided its response to a recent consultation initiated by the U.K. HM Treasury regarding the regulation of crypto-assets. In its statement, the exchange emphasizes that regulatory frameworks for crypto should prioritize consumer protection, market integrity, and financial stability. Binance believes that watchdogs need to adopt a balanced approach to regulating the industry, one that allows for growth and innovation in a competitive environment, while avoiding disproportionate regulation that could push consumers to unregulated markets and operators.
The exchange agrees that the financial services activity of crypto-assets should be defined and regulated properly. However, it argues that the regulatory regime should not impact the underlying non-financial activity of a crypto-asset. Binance also stresses the importance of treating crypto-assets that carry similar risks as other traditional financial assets the same under the regulatory framework, while ensuring that regulators take into account the impact of new technology on factors such as clearing, settlement, auditability, transparency, and governance.
Binance calls for the regulatory regime to account for the nuances of different crypto assets and to create pragmatic rules around disclosures to ensure consumers have access to the right information. It believes that exchanges should be responsible for the listing and delisting process for new cryptocurrencies and for performing necessary due diligence on issuers. Additionally, the exchange supports introducing a proper regulatory framework for admission and believes that market abuse will decline once these rules come into effect and there is greater surveillance of the markets.
The exchange also stresses the importance of defining and regulating DeFi properly, given its uncertain future development and unique risks and advantages. Binance argues that DeFi will continue to evolve rapidly and disrupt markets in new ways, and that this should be carefully considered when drafting legislation and policies for the industry.