OKX Head: Regulatory Pressure on Binance is a Benefit for the Entire Crypto Industry
OKX founder and CEO Star Xu made an unexpected but highly telling statement: the global regulatory pressure on Binance is one of the best things to happen to the cryptocurrency market. In his view, the era of "regulatory arbitrage," on which the largest exchange built its dominance for decades, is coming to an end.
The reason for such a bold thesis was information that the Greek regulator HCMC will likely reject Binance's application for a MiCA license. Without it, the exchange risks losing the right to serve clients in the European Union as early as July 1, 2026. Xu himself, I should note, has already obtained a MiCA license through Malta, so his position is that of a direct competitor.
The essence of the OKX head's position
Xu claims that many mistakenly believe that tightening regulation of Binance threatens its competitors. He holds the exact opposite opinion. For over a decade, competition in the crypto sector was largely determined not by product quality, but by regulatory arbitrage. Companies operating with fewer restrictions gained an unfair advantage over those investing in licenses, compliance, and risk management.
Now, as regulators worldwide bring Binance to uniform standards, this advantage is disappearing. Competition, according to Xu, should be built on products, technology, execution, and trust, not on the ability to circumvent rules. His main thesis is simple: regulating Binance is not a threat to the industry, but a positive event that levels the playing field.
What Xu accuses Binance of
Binance's success, according to Xu, rests not only on technology and liquidity, but also on the ability to create and promote narratives. The exchange has built a vast ecosystem of founders, former employees, venture funds, and related projects that received privileged listings and access to a retail audience. At the same time, many tokens lost more than 95% of their value after launch.
Xu describes this as a "self-sustaining cycle": when one narrative fades, a new one immediately appears, while insiders and early participants reap disproportionate benefits. The majority of losses, however, fall on retail investors. He separately criticized Binance's compliance, calling it a transition "from refusing regulation to paper regulation." He recalled that after a series of enforcement actions and the founder's prison sentence, the company changed its public stance, presenting itself as "one of the most law-abiding in the industry." However, in his view, what matters is not the number of hired specialists, but whether the programs are aimed at managing real risks or merely creating the appearance of legal compliance.
Xu also touched on the issue of shifting regulatory risks to separate entities, pointing to Binance's exit from Russia through the sale of its business to CommEX and the exchange's connection to the Aster project, whose operating model resembles Hyperliquid, previously criticized by Changpeng Zhao.
My analysis: Star Xu's position is not just criticism of a competitor, but a clear vision of the market's future. Regulatory alignment indeed destroys the "gray areas" that were the foundation of many giants' growth. The only question is whether OKX itself, which is now actively ramping up compliance, can prove that its own competitiveness is built on the product, rather than on the temporary absence of pressure on Binance. The market will closely watch how the shares of both exchanges change in the post-regulatory era.