Binance Develops Tech to Track Money, Says Crypto Isn’t for Everyone

Rohit Wad, Global Chief Technology Officer at Binance, agreed with the concerns raised by Reserve Bank of India (RBI) Governor Shaktikanta Das about cryptocurrencies, stating that crypto isn’t suitable for everyone. However, Wad emphasized that clear regulations are crucial for the growth of any industry. India has not yet established a clear stance on cryptocurrencies, with regulatory and political authorities often warning investors about their risks.

Wad explained that while RBI’s concerns are valid, they apply to many assets, not just crypto. Like equities, crypto involves risks, making it less ideal for all investors.

To address regulatory concerns, Binance has created a “plug-and-play” tech framework to ensure compliance with the laws of different countries. This includes keeping transaction records for money-laundering investigations, ensuring that Binance meets legal standards globally, including in India.

Despite keeping transaction records, Wad insists that this does not undermine the decentralized nature of cryptocurrencies. He explained that decentralization still works as expected since transactions between crypto wallets don’t involve central authorities, unlike traditional systems like India’s UPI.

Binance’s audit trail helps maintain compliance worldwide, especially when converting crypto to fiat currency, a step where many illegal activities are uncovered.

Binance’s Return to India

In December, India banned Binance and 11 other foreign crypto exchanges for not following anti-money laundering rules. However, Binance resumed operations in India in August after meeting the country’s regulations and paying a $2.25 million fine for previous unauthorized operations.

Binance has no official headquarters, having moved from China to Japan and then beyond. As of October 14, Binance held a 44% global market share, making it the largest crypto exchange, followed by Bybit at 13%.

Wad also noted that exchange-traded funds (ETFs) could help reduce concerns about the volatility of crypto assets. This year, Bitcoin has surged to around $65,000, a significant jump from $27,000 a year ago, though it remains volatile.

WazirX Controversy

In July, Indian exchange WazirX suffered a $233 million hack, leaving millions of users without a solution. While Wad declined to comment on the WazirX breach, he mentioned that Binance maintains a balance between hot and cold wallets to protect against cyberattacks. Binance also allows users to move their funds to personal wallets for added security.

Binance and WazirX have had a complicated relationship. In 2019, Binance announced it had acquired WazirX, but later denied completing the deal. After the hack, WazirX blamed Binance in ongoing lawsuits, while Binance insists it does not own WazirX.