OKX Head: Regulatory Pressure on Binance is Key to Healthy Competition in the Crypto Market
A tectonic shift is brewing in the crypto industry. OKX founder and CEO Star Xu made a statement that overturns the conventional view of competition. In his opinion, the increasing regulatory pressure on Binance worldwide is not a threat, but rather one of the best events for the entire market. The era of regulatory arbitrage, on which the dominance of the largest exchange was built for years, is coming to an end.
The discussion was sparked by information that the Greek regulator HCMC may reject Binance's application for a MiCA license. Without it, the exchange risks losing the right to serve clients in the European Union from July 1, 2026. OKX itself has already obtained a MiCA license through Malta, and Xu speaks from the position of a direct competitor, but his argumentation goes far beyond corporate interests.
The End of the "Gray" Scheme Era
Xu claims that for over a decade, competition in the crypto sector was determined not by the quality of products or technologies, but precisely by regulatory arbitrage. Companies operating with fewer restrictions gained an unfair advantage over those investing in licenses, compliance, and risk management. Now that regulators are bringing Binance to uniform standards, this advantage is disappearing.
"Competition should be built on products, technologies, execution, and trust, not on the ability to circumvent rules," emphasizes the head of OKX. He believes that the ability to operate outside the norms was Binance's main competitive advantage, not its liquidity or innovations.
Criticism of Binance's "Self-Sustaining Cycle"
Xu also criticized Binance's ecosystem, calling it a "self-sustaining cycle." According to him, the exchange created a vast network of founders, former employees, venture funds, and related projects that received privileged access to listings and retail audiences. Meanwhile, many tokens lost over 95% of their value after launch, with losses borne by retail investors.
"Instead of losses in the past cycle, users are asked to focus on potential profits in the next one," Xu ironically remarks, hinting at the classic pump and dump scheme.
Binance Compliance: From Backlash to "Paper" Regulation
Separately, the head of OKX addressed the topic of Binance's compliance after a series of enforcement actions and the four-month prison sentence of founder Changpeng Zhao. In his opinion, the exchange has changed its public stance, presenting itself as "one of the most law-abiding in the industry," but what matters is not the number of hired specialists, but whether the programs are aimed at managing real risks or merely at the appearance of legal compliance.
Xu also pointed out Binance's attempts to shift regulatory risks to separate structures, recalling the exit from Russia through the sale of the business to CommEX and the connection with the Aster project, whose operational model resembles Hyperliquid, previously criticized by Zhao.
My analysis: Star Xu's statement is not just criticism of a competitor, but a clear signal to the market. The era when size and aggressive marketing compensated for a lack of transparency is ending. Regulation is becoming the main driver of the crypto market's evolution, and the winners will be those who can offer the best product within a unified and clear set of rules. This fundamentally changes the industry landscape.