Binance is apparently planning to buy banks and payment processors. According to CoinDesk, CEO Changpeng “CZ” Zhao made the news at Ethereum Rio, a local blockchain conference in Rio de Janeiro (March 17). Three days earlier, the world’s largest cryptocurrency exchange signed a letter of intent to potentially purchase Sim; paul Investimentos, a Brazilian securities brokerage firm.
Zhao also said the company is looking to strengthen its 100-person team in Brazil while speaking at EthereumRio, an Ethereum community event held in Rio de Janeiro.
On Monday, Binance signed a Memorandum of Understanding (MoU) to buy Brazilian securities brokerage Sim;paul Investimentos, prompting Zhao’s comments.
According to Zhao, the exchange intends to work closely with regulators and government organizations to identify ways to promote the crypto industry’s development “in a healthy and collaborative way.” Zhao visited with regulators and politicians in Brazil, including Joo Dória, the governor of the Brazilian state of So Paulo, on Monday.
Binance has courted regulatory officials actively in what Zhao termed as a “shift from reactive compliance to proactive compliance” last August.
The company got a crypto-asset service provider license from the Central Bank of Bahrain on March 14, followed by a Virtual Asset License from Dubai’s Virtual Asset Regulatory Authority two days later.
Following a series of run-ins with regulators in the EU and Asia late last year, Binance is looking to create a headquarters. Buying a licensed bank to become compliant is not a novel concept in the industry.
Coinbase, a long-time compliance-focused crypto exchange, purchased securities dealer Keystone Capital in 2018 in order to achieve broker-dealer status with the US Securities and Exchange Commission. BitMEX, a crypto derivatives exchange, bought Bankhaus von der Heydt, a 268-year-old German bank, in January as part of its aim to create a “regulated crypto products powerhouse in the heart of Europe,” according to BitMEX Group CEO Alexander Höptner.
Through local relationships, Binance competitors like OKEx and Crypto.com were able to gain access to Brazil’s government-backed PIX immediate payment system. However, talk of suspending PIX late last year — for unconnected reasons — underlines a major advantage: changes in a country’s political and regulatory climate would not take exchanges offline.
With Brazil reportedly on the verge of regulating cryptocurrency exchanges, purchasing a bank may be easier than persuading one to agree to serve its customers — or to do so in the future.
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