Faced with pressure from regulators, Binance agrees to set up a headquarters. According to Changpeng Zhao, CEO and founder of the exchange, the headquarters demanded by the financial authorities could well be established in Ireland, a country known for its many tax advantages.
Binance could establish its headquarters in Ireland, announces Changpeng Zhao
Interviewed by Reuters, Changpeng Zhao, CEO and founder of Binance, spoke about the future headquarters of the company. According to him, the headquarters of the cryptocurrency exchange platform may well be established in Ireland. Besides, the exchange has recently established three subsidiaries in the country, namely Binance (APAC) Holdings, Binance (Services) Holdings and Binance Technologies.
“Historically, we claim that we don’t have a headquarters. In fact, we are just establishing some headquarters in different parts of the world,”says Changpeng Zhao.
Changpeng Zhao is committed to transforming Binance into a true financial institution. To achieve this, the company executive must abandon the decentralized model of his exchange and comply with the requirements of the authorities. The authorities are demanding that Binance be given a centralized headquarters. This is the opinion expressed by regulators in Singapore, Italy, the Netherlands and South Africa.
“When we started, we wanted to adopt decentralized principles, no headquarters, work anywhere in the world, no borders. It’s very clear now that to run a centralized exchange, you need a centralized legal entity structure behind it,”acknowledges the Binance boss.
At the request of the regulators, Changpeng Zhao therefore started looking for a country capable of hosting the future headquarters of Binance. Obviously, he chose Ireland. At the same time, Binance has already taken a number of measures to avoid the wrath of the regulators. For example, Binance limited withdrawals to 0.06 BTC per day for basic accounts before imposing Know Your Customer (KYC) verification on all investors.
In recent months, numerous financial regulators have imposed sweeping restrictions on Binance. With its back to the wall, the platform was forced to abandon its derivatives offering in several countries, including Australia, Singapore, Brazil, and Hong Kong.
Why is Binance looking to Ireland?
Ireland is not a trivial choice. Over the years, the Emerald Isle has established itself as a tax haven for digital companies. In Ireland, the tax rate on corporate profits does not exceed 12.5%. This is one of the lowest rates in the world. The European average is around 27%. In addition, dividends are rarely taxed.
To benefit from these advantages, companies must have a permanent physical establishment in Ireland. Many American multinationals have therefore set up their European headquarters in Ireland. This is notably the case for Facebook, Twitter, Apple, Google, eBay and PayPal.