Binance spending on compliance requirements to exceed $200 million amid new hiring plans, which is more than Ripple’s legal costs in the SEC lawsuit.
Binance, the world’s largest cryptocurrency exchange, is preparing to make significant investments in ensuring full compliance following recent regulatory conflicts worldwide.
Binance Holdings plans to hire 1,000 new employees this year, many of whom will focus on compliance roles.
The company intends to spend more than what Ripple spent in its legal battle with the SEC.
Binance’s Commitment to Regulatory Compliance
In Bloomberg interview, Binance CEO Richard Teng discussed the company’s commitment to regulatory compliance and its hiring objectives for the year.
“I’ve been a regulator all my life,” Teng said, emphasizing that “Government agencies are important.”
The exchange is facing increasing costs due to compliance monitoring by the Department of Justice (DOJ) and the US Treasury’s Financial Crimes Enforcement Network.
Previously, a plea deal with the DOJ and other US agencies included a $4.3 billion penalty for money laundering violations and compliance issues.
Spending on compliance has already exceeded $200 million, up from $158 million two years ago.
Richard Teng expects these costs to rise further as monitors appointed by US agencies, Forensic Risk Alliance and Sullivan & Cromwell, have already begun their work.
Binance’s compliance expenditures are set to surpass even Ripple Labs’ legal costs in the Ripple vs. SEC lawsuit.
CEO Brad Garlinghouse previously mentioned that defending against the SEC lawsuit had cost Ripple $200 million.
The court also ordered Ripple to pay $125 million in penalties for violating securities laws in its XRP sales to institutions.
The cryptocurrency industry as a whole has spent billions on compliance or settlements with regulators, posing significant challenges amid a lack of clear regulatory guidelines.
Crypto Hiring Reflects Optimism
Since Changpeng “CZ” Zhao stepped down as Binance’s CEO, Richard Teng has worked with prime brokers, tightened requirements for new crypto listings, and separated the venture arm Binance Labs.
The company aims to have 700 employees dedicated to compliance roles by the end of 2024.
Teng also stated that they would continue to contest the allegations in the SEC lawsuit.
A judge recently ruled that most arguments against Binance and its co-founder CZ would move forward.
Other cryptocurrency companies like Tether have also announced plans to expand their workforce.
Tether CEO Paolo Ardoino indicated plans to double its workforce, signaling a potential market recovery.
