According to a 30 June 2022 press release, Binance has signed a memorandum of understanding (MoU) with the Securities and Exchange Regulator of Cambodia (SERC). The global behemoth is changing tactics as it looks to Southeast Asia’s underdeveloped market. It has successfully reversed the “enter first, comply later” technique that financial authorities in the U.K., Japan, and Singapore had warned about.
Binance to assist Cambodia in developing crypto regulation
Binance and SERC will collaborate to create crypto laws in the country. SERC plans to leverage Binance’s technical knowledge and experience in the sector to establish its legal framework for the digital assets market. In Southeast Asia, cryptocurrency regulations are still a work in progress.
The French government, in May, gave the go-ahead to Binance’s subsidiary, making it the first European country to do so. It may also help Binance resolve outstanding concerns with other European nations. The crypto exchange was banned from regulated financial activities in the United Kingdom and received a warning from Japan to cease operations without a license.
Cryptocurrencies aren’t controlled in Cambodia. Furthermore, any unlawful activity involving cryptocurrencies is highly discouraged. The collaboration could be significant for the South Asian nation, where any crypto-related behavior is currently prohibited due to strict legislation.
Gleb Kostarev, Binance Regional Head of Asia, said:
Within the Southeast Asia region where the blockchain and digital asset adoption rate is high, Cambodia has the potential to be a leading market. Binance hopes to add value to the Cambodian securities industry by providing extensive and professional knowledge of the digital asset market.
Asia has become a crypto hotspot in recent years, with several countries adopting a pro-crypto stance. Thailand, Singapore, Malaysia, and the Philippines have all developed progressive legislation to encourage the use of cryptocurrency assets in their economies.
Binance’s Asia-Pacific division head, Leon Foong, said the market downturn is an opportunity for the entity to rebuild the industry with better players. In the last three months, cryptocurrency capitalization has dropped $1.26 trillion, or 58%. According to CoinMarketCap, the value of all cryptocurrencies has dropped below $1 trillion for the first time since the bull run began in early 2021.
While there’s some market correction now, this will be a time of greater resilience. The projects that survive are the ones that will be here for the long run. We want regulators to see that resilience so they can have comfort and clarity on regulating this new asset class.
Foong spoke with Nikkei Asia about Binance’s plans to launch a Thai exchange through a joint venture with Gulf Energy Development.
Could stronger crypto regulations reverse crypto winter?
Binance has made particular efforts to preserve positive regulatory ties. This is especially after Binance’s 2021 catastrophe, in which nearly half a dozen nations issued warnings against the cryptocurrency exchange. Since then, the world’s largest cryptocurrency exchange has repaired its ties and formed meaningful partnerships in Asia throughout the past year, notably in Thailand, Malaysia, and Singapore.
The company has also become well-known for assisting governments with crypto regulation and offering technical assistance to them in the nascent sector. The exchange has entered into a $15 million investment agreement with Bermuda to teach and educate the community about blockchain technology.
Binance’s regulatory access in the developing world has piqued the interest of many, including Alex Gladstein, chief strategy officer at the Human Rights Foundation. Gladstein praised Binance’s recent growth in emerging markets such as Asia, Africa, and the Middle East, stating:
While Western cryptocurrency companies are buying Superbowl ads and sports stadium rights, Binance is ruthlessly and custodial taking over emerging markets in Asia, Africa, the Middle East, and Latin America. They are winning.
In May, the crypto exchange signed a similar MoU with the government of Kazakhstan to assist them in promoting and regulating cryptocurrency use. It had previously entered into an MoU with the Dubai World Trade Centre Authority (DWTCA) in December 2021 and later received a license to operate in the nation.
The crypto exchange is attempting to grow its workforce by 2,000 people to fewer than 10,000 amid a bearish market climate. Coinbase, Nasdaq-listed Coinbase, and Crypto.com all announced cuts of more than 5% this month, as did BlockFi with 20% of its employees and BlockFi with 20%.
In the face of the worst crypto winter on record, the agreement between Binance and Cambodia is a welcome sight. The heads of Binance believe that crypto regulation can help bring cryptocurrency back into the spotlight.
H.E Mr. SOU Socheat, Deputy of the Royal Government in Charge as Director-General of SERC, stated:
We hope to implement the digital asset innovation in the right way in Cambodia through the collaboration with Binance. SERC has not issued any digital asset license currently, but we are working to develop proper regulations and expect this MoU to be a stepping stone for our future regulatory work.