Binance CEO Weighs In On The Notion Of “Offshore” Crypto Businesses

Binance CEO Changpeng Zhao took to Twitter on February 19 to suggest that distinguishing between onshore and offshore businesses constitutes a false distinction.

Zhao posted his comments in response to Kraken CEO Jesse Powell, writing:

“[Powell] uses the word “offshore” quite often … The term “offshore” seems far too narrow-minded, self-centered, misses the wider picture and [is] unhelpful to the development of our industry.”

Zhao argued that all companies operate on land relative to their own countries. He said that distinguishing in this way is “arrogant” and added that believing in the superiority of companies in one’s own country is not a cure for the crypto industry.

He also noted that such thinking has apparently failed to prevent fraud on land. Zhao observed that FTX.US failed along with FTX despite the fact that, compared to the US, it was an onshore company with many US executives.

Zhao explicitly denied that this kind of sentiment is only seen in the United States. He said it can also be seen in Asia, as there are Chinese and Japanese words used to refer derogatorily to foreign businesses (“lao wai” and “gaijin” respectively).

Zhao’s comments specifically criticized statements made by outgoing Kraken CEO Jesse Powell on February 17. Powell had lamented that US regulators did not listen to his complaints about offshore companies and issued excuses for those companies – even as those regulators took action against Kraken’s efforts. program this month.

Zhao appeared to acknowledge the seriousness of Powell’s situation, writing in a tweet: “I’m sorry to say [this] i.e. directly. No harm intended.”

Despite Zhao’s feelings about on- and offshore operations, his company must now navigate international rules. Binance’s US stablecoin partner, Paxos, announced on February 13 that it would stop issuing Binance USD (BUSD) for regulatory reasons.

Reports from the Wall Street Journal on February 15 additionally suggested that Binance will pay fines to US regulators to resolve regulatory probes. Zhao added on February 17 that while Binance does not plan to remove US-based cryptocurrencies, the company will likely reduce US investments and bids and will instead “seek permission first.”

Binance.US is also facing scrutiny over its connection to trading company Merit Peak.