Interview with Olga Goncharova, director of government relations at Binance in the CIS.
– Baku hosted the International Banking Forum. Was the purpose of your visit only to speak at the Forum?
– No, not only. On the sidelines of the forum, we held meetings with the Ministry of Economy of Azerbaijan, as well as with other structures. We want to agree on cooperation, promote Binance in your country.
– At the Forum, you spoke about the main trends in the global regulation of the crypto industry. Can you tell our readers about it too? What awaits us in 2023?
– This year turned out to be quite difficult for the crypto industry. In 2021, everything was developing rapidly, everyone was talking about new breakthrough technologies, DeFi and NFT, there was a very high capitalization, which reached $3 trillion. But 2022 was a difficult year, we all witnessed the collapse of several large cryptocurrency projects, so the crypto industry is having a difficult time right now.
Nevertheless, we see a positive picture. If earlier regulators only looked closely at the crypto industry, there was no clear understanding of how to approach regulation, now there is a certain global consensus – it is better to regulate this market than to leave it in a gray zone.
Unfortunately, not all regulators have come to this conclusion yet, but we see that large-scale licensing of the crypto industry began in 2022. This year, Binance received 15 licenses and registrations in various jurisdictions in France, Spain, New Zealand, Australia, Dubai (UAE), Kazakhstan and other countries around the world. We see that regulators are actively taking the crypto industry out of the gray zone. This is done in order to protect the interests of users, since when an activity is licensed, the attention and requirements of regulators to sites increase, thereby ensuring greater protection of citizens, which is very important.
In addition, in 2022 there are other issues that are of interest to regulators. These are issues of financial stability. For example, many European regulators are talking about the dollarization of the cryptocurrency market, since now most stablecoins are pegged to the dollar. In this regard, the idea of creating eurocoin stablecoins is being promoted. And a kind of de-dollarization of the crypto market is also an important topic.
– Cryptocurrency is not popular in Azerbaijan. One of the reasons is the lack of stability in this area. What strategy do you think the regulators in Azerbaijan should adopt in this case?
– I am familiar with your regulation. Or rather, with his absence …
As I said, probably the simplest thing is to leave the industry in a gray area and not develop regulation. But this strategy is not very good in the long run. Binance is actively developing its presence in all CIS countries, and I communicate a lot with regulators in various countries, so I understand such rhetoric, because when there is no regulation, then there is no question for regulators. But it seems to me that turning a blind eye to this industry is not entirely true. Because with regulation, the requirements for crypto platforms increase, requirements are introduced for products, for investors, etc. Any regulation forces the industry to be stronger and, as a result, the security of citizens increases.
The second point is that with regulation, the country has the opportunity to increase budget revenues. Because if the activity is regulated, it is taxed.
And thirdly, flexible, balanced regulation always promotes innovation, because any ban forces the most innovative players in the industry to move to other jurisdictions.
Protection of consumer rights, replenishment of revenues to the country’s budget, as well as the creation and retention of innovative potential in the economy are very important. And all this is achieved with proper and balanced regulation.
– We have heard about the news from Georgia, where Binance is entering the market. Could you, using the example of a neighboring country, tell us what the development of the crypto industry will give us?
– I love Georgia as much as Azerbaijan. The countries are similar, they are very advanced. Indeed, there is already crypto legislation in Georgia. Licensing will start in 2023. Georgia has taken a progressive path. The Georgian legislation was based on the requirements of the FATF – a group for the development of standards for combating money laundering and the financing of terrorism.
As far as I know, the National Bank of Georgia plans to further develop the legislation. That is, there will be regulatory legal acts that will more accurately determine the requirements for the capital of crypto-exchanges, for their liquidity, personnel, etc.
We have very good relations with the National Bank of Georgia, we conducted a three-hour training for them, which was dedicated to the development of global regularity and the requirements of global legislation on anti-money laundering (combating money laundering – ed.). We have a very strong Global Investigation team (global investigation – ed.), because the main risks of crypto are associated with illegal transactions, fraud. If it is interesting in Azerbaijan as well, we will be happy to conduct trainings here as well.
– What measures does Binance take to protect users from crypto scammers? And are there any mechanisms for cooperation with the authorities?
– As the world’s leading crypto exchange, we have the largest compliance team, over 500 people. These are the best people in the industry. We cooperate with law enforcement agencies, use the best services for financial monitoring. For example, over the past year, our team has processed 27,000 requests worldwide. We respond within three days, and our response speed is much faster than that of a traditional financial institution.
We conduct a lot of trainings, tell you what a blockchain system is in general, and train law enforcement agencies. The new industry is constantly evolving, and we want law enforcement to understand all the mechanics. Binance has already held about 30 trainings in the US, Canada, Kazakhstan, Georgia, Australia, Philippines, etc.
We have different methodologies to comply with the anti-money laundering directives 5 and 6, which prescribe how procedures are built to combat money laundering and terrorist financing. We use cutting edge solutions in the industry.
– In the context of volatility in the cryptocurrency market, what strategies would be better to choose for investment?
– We do not give investment advice. We adhere to the “do your own research” policy. You must have sufficient knowledge if you go into crypto investing. We must understand that free cheese is only in a mousetrap. Therefore, when someone wants easy money, one must be aware that with how easily this money can be earned, losses are also possible with such ease.
Therefore, we strongly urge you never to invest large or last amounts of money if you are doing this for the first time. That is, you need to start with the amount of money that you do not mind losing. And we encourage all users to learn. We have a very good resource Binance Academy – this is the largest educational resource in the crypto industry. And if you want to understand crypto-investing, then Binance Academy will help you.
There is a lot of information on the market and sometimes it is difficult to figure out what is right and what is not, but this is everyone’s personal responsibility. You just need to stock up on certain knowledge before making decisions.
– And how do citizens of Azerbaijan most often use cryptocurrency, do they invest?
– Spot trading, p2p transfers, and Binance Earn products are popular for users in Azerbaijan. Such basic products that are used all over the world. But we see a positive trend, the number of users is growing, that is, cryptocurrency is gaining popularity in Azerbaijan.