Binance found guilty of bad practices in the US, but in Mexico they remain unregulated, analysts

Binancethe cryptocurrency exchange platform, was recently sanctioned by a United States judge with a fine of 4.3 billion dollars for various violations of anti-money laundering laws. Changpeng ZhaoCEO and Founder of Binanceadmitted his guilt and was forced to give up to his position.

According to a New York Times report, Zhao could face up to 18 months in prison. However, this time could be extended, as prosecutors keep open the possibility of requesting a more severe sentence, according to the publication, which cites senior officials. Justice Department officials. So far, his request to leave the United States has been denied on two occasions until his visa is issued. judgment.

According to what is also stated media international as The Wall Street Journal For several years Binance implemented a global strategy to avoid being regulated and also be able to carry out money and cryptocurrency operations between its various entities. The plan calledTai Chi” consisted of creating many companies and getting licenses in various parts of the world with the ultimate goal of avoiding supervision by any financial authority, as has also been explained in Mexican media.

According to specialists, the penalties imposed on Binance set an important example for cryptocurrency exchange platforms that want to operate properly and under regulation.

The proper regulation of companies cryptocurrencies It is an essential issue to protect the interests of the public, they add, because as already seen, crypto exchange platforms that do not fully comply with regulations can be sanctioned at any time and even closed without any clear knowledge of what could happen to their clients’ funds, cases like these having already happened.

For specialists, the regulation guarantees solvency and sound financial management to provide security for clients’ assets. Likewise, being a regulated entity provides secure access to the financial system.

You may be interested in: Cryptocurrencies in crisis; Changpeng Zhao pleads guilty to money laundering

Finally, it is added, the regulation obliges platforms to manage risks and prevent malicious actors from using them to facilitate money laundering or other illicit activities such as financing terrorism, human trafficking among others, as noted in the NYT.

However, despite the multiple trials and sanctions that Binance has faced, appears to continue applying regulatory arbitrage strategies in the countries where it continues to operate to avoid regulation and supervision of the financial authorities.

From the hand of his director and person in charge of executing this strategy in Mexico, Frida Vargas, Binance currently offers the purchase cryptocurrency sale through a business model that could contravene the regulations and policies of the National Banking and Securities Commission and the Bank of Mexico, financial analysts warn.

For example, the company openly advertises in the media and social networks that it can receive deposits and open digital wallets in Mexican pesos despite not having authorization as an Institution of Electronic Payment Funds. Likewise, it openly announced that it can process SPEI payments indirectly despite not being a financial entity.

Various companies in the fintech sector national and foreign who have previously been fined for less serious conduct have expressed their inconvenience as there is no even floor.

It should be noted that in this parallel scheme other companies are used in order to allow the Binance access to the financial system. The STP and Inswitch companies provide various services that allow the connection and movement of flows so that Binance can comfortably operate its business without worrying about being regulated.

The use of these third parties facilitates Binance’s operation while at the same time spreading the inherent risks of a transaction to others. operation that seems to pretend to be regulatedit is observed.

The above confirms that Binance evades the authorization and subsequent processes supervision in order to operate as a platform in our country, but above all it shows that, knowing what has already happened in other countries, insists on not following the minimum regulation to guarantee protection of users of financial services and the integrity of our financial system. It will be the responsibility of Dr. De la Fuente, who leads the CNBV, define the supervision strategy to follow.

Will the same story repeat itself in Mexico as what happened in the United States? They ask themselves in the regulated fintech industry.

AIHC