Crypto Exchange Facing Regulatory Challenges Globally
By [Author’s name]
Even before CZ had been fined $4.3 billion by the US government and accused of various crimes, Binance Holdings Ltd. had been facing significant regulatory challenges globally.
Australia, Singapore, and Hong Kong
Australia canceled Binance’s license for a derivatives operation and searched several of the company’s locations there. Singapore ordered the firm to stop doing business in the city state. Hong Kong warned more than two years ago that Binance was an unregulated platform.
Challenges in Dubai
Even in Dubai, where CZ primarily resides, the exchange has yet to gain full authorization. But beyond the embattled exchange business, another corner of the broad CZ-owned portfolio of crypto companies said it’s seeing growth in countries like India and Pakistan.
Opportunities in Asia
Trust Wallet is a software-based crypto wallet service designed to let users self-custody digital assets popular in decentralized finance applications. The company has reported growth in countries like India and Pakistan — based on third-party data on downloads — as well as business opportunities in the UAE. CZ acquired a majority stake in the company, operating Trust Wallet, in 2018. Its current CEO, Eowyn Chen, identified Southeast Asia as potential markets for the wallet platform.
Expansion Plans
With about 56 million downloads on iOS and Android, Trust Wallet is the most popular crypto wallet for handheld devices. The company has identified Vietnam, the Philippines, and Indonesia as markets for expansion. Despite the growth potential in Asia, the company is shifting its operations to the United Arab Emirates, with Chen moving to Dubai from Virginia in October.
Regulatory Outlook in the UAE
Chen described regulators in the UAE as having a “friendlier outlook toward crypto in general” and has expressed confidence about “reasonable regulation on decentralized finance.” The company operates from the free trade zone of Ras Al Khaimah and holds intellectual property rights in Abu Dhabi Global Market. It aims to diversify its risk management from the US regulatory uncertainties by setting up in the UAE.
Pursuit of Profitability
Despite not being profitable yet and only starting to generate revenue in the last year, Trust Wallet is seeking growth opportunities and strategic advice from CZ. TWT, the company’s native token, experienced a significant jump last November after CZ promoted the app. The company has focused on organic growth and word-of-mouth promotions rather than a substantial marketing budget.
Uncertainties and New Competitors
CZ’s recent settlement with US prosecutors led to leadership changes at Binance. The company recently launched a branded crypto wallet platform, potentially competing directly with Trust Wallet. The future of both platforms remains uncertain, leaving the potential for further competition and challenges in the crypto industry.
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