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Following the indictment of its CEO, Changpeng Zhao, Binance now says compliance is at the top of its agenda.
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A potential Binance failure would send shockwaves through markets in a way that is hard to gauge. The exchange is home to 36% of all crypto holders worldwide, with more than 200 million users and $100 billion in assets held on its platform.
In 2023, the United States Department of Justice considered such factors when deciding on penalties for Binance instead of criminal charges to reduce the harm to consumers. The DOJ eventually settled with Binance, imposing $4.3 billion in fines to address regulatory violations. The deal also resulted in Binance’s founder, Changpeng “CZ” Zhao, permanently stepping down from his role as CEO.
Since then, Binance has been heavily investing to mitigate its biggest threat: noncompliance. In an exclusive interview with Cointelegraph during the Token2049 Conference, the exchange’s new CEO, Richard Teng, said Binance now sees compliance as a “competitive advantage” and has invested nearly $200 million in its compliance program over the past two years.
“We have the financial ability to invest very heavily in compliance. Some other players don’t, so we intend to make it a competitive advantage,” said Teng.
Related: CZ sentenced: A chronology of Binance’s legal battles in the US
While Binance has navigated its legal troubles in the US, it still faces a fragmented regulatory landscape globally. The exchange has recently faced challenges from regulators in large markets such as France, India, Brazil and Nigeria. According to Teng:
“Binance today operates in a very different environment, so we have to change with that.”
Under its strategy of using compliance as a “competitive advantage,” Binance is increasing its legal workforce. At least 20% of new hires in 2024 were focused on compliance. The company’s goal is to increase this headcount to 700 by the end of the year, up from 500 in August. According to its website, it currently employs more than 5,200 people in over a hundred locations.
After serving a four-month sentence for charges related to Anti-Money Laundering (AML) violations, CZ is expected to be freed at any time in the coming days. As part of his plea deal with US prosecutors, he has been reportedly banned from operating or managing Binance for a lifetime but plans to be “available to the team to consult as needed.”
Out of Binance’s operations, CZ’s next chapter likely includes a nonprofit organization dedicated to education in developing countries.
“As for his [CZ] future plans, I’m afraid you have to ask him when you get a chance,” Teng replied.
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This article first appeared at Cointelegraph.com News
