Changpeng Zhao, the founder, and CEO of Binance, recently emphasized the need for clear crypto regulations at the Web3 Festival in Hong Kong.

As the world’s largest cryptocurrency exchange, Binance has been at the forefront of discussions around cryptocurrency regulations, with Zhao stating that unclear regulations are the “worst” and that having bad restrictive regulations is better than having no regulatory clarity at all.

Zhao highlighted the importance of regulators understanding the nuances of the crypto industry, stating that applying traditional financial regulations to cryptocurrency isn’t the solution. He noted that the lack of clear regulations can be harmful, with enforcement measures being taken against individuals and businesses without a clear understanding of the rules.

These comments from Zhao come after Binance faced regulatory challenges, with the Commodities Futures Trading Commission recently filing a lawsuit against Binance and Zhao for violating derivatives rules by allowing US residents to trade various financial instruments involving digital assets without licensing approval.

Additionally, Binance Australia’s derivatives license was canceled by the Australian Securities and Investments Commission, a day after the exchange submitted a cancellation request.