OKX CEO: Regulatory pressure on Binance is a benefit for the entire crypto industry
OKX founder and CEO Star Xu made an unexpected but highly revealing statement: the global regulatory pressure on Binance is one of the best things to happen to the crypto market in recent years. In his view, the era of regulatory arbitrage, on which the largest exchange built its dominance for decades, is coming to an end. And paradoxically, this opens a new chapter in the industry's development.
The discussion was sparked by information that the Greek regulator HCMC may reject Binance's application for a MiCA license. Without it, the largest exchange risks losing the right to serve clients in the European Union from July 1, 2026. Notably, OKX itself has already obtained a MiCA license through Malta, and Xu speaks from the position of a direct competitor, which lends particular weight to his words.
The essence of the OKX CEO's position
Xu claims that many perceive the tightening of regulation on Binance as a threat to competitors, but he holds the exact opposite view. For over a decade, competition in the crypto sector, in his opinion, has been defined by regulatory arbitrage. Companies operating with the fewest restrictions gained an unfair advantage over those investing in licenses, compliance, and risk management.
As regulators bring Binance in line with global standards, this advantage is gradually disappearing. Competition, Xu believes, should be based not on who operates under the fewest rules, but on product quality, technology, execution, governance, and trust. The main thesis of his statement is simple: regulating Binance in more jurisdictions is not a threat to the industry, but a positive development.
Xu emphasizes: for years, the exchange's strongest competitive advantage was not technology, liquidity, or products, but precisely arbitrage and control over the narrative. As regulators increasingly focus on governance, control, and real results, rather than marketing and social media influence, these advantages are weakening. The future winners of the crypto market, according to Xu, should be determined by better products, responsible treatment of users, and the ability to manage risks, not by the ability to circumvent rules.
What Xu accuses Binance of
Binance's success, according to Xu, was built not only on technology and liquidity but also on the ability to create and promote narratives around crypto assets. The exchange built a vast ecosystem of founders, former employees, venture funds, and related projects that received listing rights and access to the retail audience. At the same time, many tokens lost over 95% of their value after launch.
Xu describes this as a "self-sustaining cycle": when one narrative fades, a new one immediately emerges. Insiders and early participants gain disproportionate benefits, while the majority of losses fall on retail investors. Instead of focusing on losses from the previous cycle, users are encouraged to concentrate on potential profits in the next one.
Separately, the OKX CEO criticized Binance's compliance, calling it a transition "from refusing regulation to paper regulation." He recalled that after a series of enforcement actions and a four-month prison sentence for founder Changpeng Zhao, the company changed its public stance and began presenting itself as "one of the most law-abiding in the industry." However, according to Xu, 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 raised the issue of shifting regulatory risks to separate entities. He pointed to Binance's exit from Russia through the sale of its business to CommEX and the exchange's connection to the Aster project. The platform's operating model, in his view, is similar to Hyperliquid, which was previously criticized by Changpeng Zhao.
Expert commentary: Star Xu's position is not just criticism of a competitor, but a clear signal to the market. The era when exchanges could impunely choose jurisdictions with minimal oversight is indeed coming to an end. Regulatory standardization is a painful but necessary process for the maturation of the crypto industry. The only question is whether Binance can adapt to the new realities faster than it loses its market share to more agile and prepared competitors like OKX.