Binance has declared that compliance is its primary concern following Changpeng Zhao’s indictment.
The impact of a prospective Binance failure on the markets would be difficult to predict. With over 200 million users and $100 billion in assets on its platform, the exchange is the residence of 36% of all crypto holders worldwide.
Binance Conducts Review Following Ex-CEO’s Arrest
The United States Department of Justice considered these factors 2023 when determining penalties for Binance, rather than pursuing criminal charges, to mitigate the impact on consumers.
However, the Department of Justice ultimately settled with the crypto exchange, imposing a sanction of $4.3 billion to rectify regulatory violations. Additionally, the agreement necessitated the irreversible resignation of Binance’s founder, Changpeng “CZ” Zhao, as CEO.
Since that time, the exchange has been making significant investments to address its greatest threat: noncompliance.
Binance’s new CEO, Richard Teng, disclosed in an exclusive interview with Cointelegraph at the Token2049 conference that the exchange now regards compliance as a “competitive advantage” and has allocated nearly $200 million to its compliance program in the past two years.
“We possess the financial resources to allocate a significant amount of resources to compliance.” Teng stated, “We intend to leverage this as a competitive advantage, as some other players do not.”
Although Binance has successfully resolved its legal issues in the United States, it continues to contend with a fragmented regulatory environment on a global scale. Regulators in significant markets, including France, India, Brazil, and Nigeria, have recently presented obstacles to the exchange. Teng said:
“Binance today operates in a very different environment, so we have to change with that.”
The crypto exchange is expanding its legal team as part of its strategy to leverage compliance as a “competitive advantage.” In 2024, compliance was the primary focus of at least 20% of recruits.
By the year’s conclusion, the organization intends to augment its workforce from 500 employees in August to 700. As indicated by its website, it currently employs over 5,200 individuals in over 100 locations.
CZ is anticipated to be released shortly after serving a four-month sentence for allegations related to Anti-Money Laundering (AML) violations.
According to reports, he has been prohibited from operating or managing Binance for his lifespan as part of his plea agreement with US prosecutors. However, he intends to remain “available to the team to consult if necessary.”
A nonprofit organization dedicated to education in developing countries will likely be included in CZ’s next chapter, which will stem from Binance’s operations.
Teng responded, “I regret to inform you that you will need to inquire about his [CZ] plans when you have the opportunity.”
