OKX Head: Regulatory Pressure on Binance is a Boon for the Entire Crypto Industry
OKX founder and CEO Star Xu has unexpectedly given a positive assessment of the global regulatory pressure on Binance. In his view, the era of "regulatory arbitrage," which for years was the main competitive advantage of the largest exchange, is coming to an end, and this benefits the entire market.
The End of the "Regulatory Arbitrage" Era
Xu claims that for over a decade, competition in the crypto sector was determined not so much by technology as by the ability to operate with minimal restrictions. Companies that circumvented licensing and compliance requirements gained an unfair advantage over those investing in regulatory adherence. Now, as global regulators increasingly bring Binance to uniform standards, this advantage is disappearing.
According to him, regulatory pressure is not a threat but a positive shift. The market is moving toward a model where competition will be based on product quality, technology, risk management, and trust, rather than on the ability to evade rules.
Critique of the Binance Model
Xu also detailed the Binance success model. He believes that Changpeng Zhao's exchange built a vast ecosystem where insiders, venture funds, and related projects received privileged access to listings and retail audiences. Meanwhile, many tokens lost over 95% of their value after launch.
He describes this as a "self-sustaining cycle": when one narrative fades, a new one emerges, with the bulk of losses falling on retail investors. Instead of focusing on losses from the previous cycle, users are encouraged to look at potential profits in the next one.
Compliance as a Facade?
Xu was particularly harsh on Binance's compliance efforts, calling it a shift "from refusing regulation to paper regulation." After a series of enforcement actions and the founder's prison sentence, the exchange changed its rhetoric, but 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 an appearance of compliance.
He also touched on the transfer of regulatory risks to separate entities, mentioning Binance's exit from Russia through the sale of its business to CommEX and the exchange's connection to the Aster project, whose model resembles Hyperliquid.
My analysis: Star Xu's stance is not just altruism. OKX has already obtained a MiCA license through Malta, and for it, leveling the regulatory playing field is a direct path to strengthening its competitive position. However, his arguments about the systemic risks of the Binance model and the need for fair competition sound convincing. The crypto market is indeed maturing, and "regulatory arbitrage" as a strategy is becoming a thing of the past. The only question is how quickly Binance can adapt to the new reality.