OKX founder: Binance becoming regulated will weaken its competitive edge

In response to reports that Greek financial authorities may reject Binance's MiCA license application, OKX founder Star Xu commented on X that Binance entering the global regulatory fold would be one of the most positive developments for the crypto industry. He argued that while many believe a regulated Binance would threaten competitors, he disagrees. For the past decade, Xu explained, competition in the crypto space has largely depended on regulatory arbitrage, where firms with fewer constraints have an advantage over those heavily invested in licensing, compliance, and governance. If Binance becomes regulated, this advantage will gradually disappear, and competitiveness will instead be determined by factors like product, technology, execution, customer service, and trust. Xu added that the more regulators focus on governance, internal controls, and tangible results over marketing and social media influence, the more Binance's current strengths will diminish.