Facing regulatory scrutiny and the legal troubles of its former CEO, Zhao Changpeng, Binance, the world’s largest cryptocurrency exchange, has increased its compliance budget significantly by 35%. The company reports a year-over-year rise from $158 million to $213 million, demonstrating a strong commitment to strengthening its compliance infrastructure.
This expanded budget involves significant investments in new software systems aimed at efficiently identifying, blocking, and reporting suspicious transactions.
Additionally, Binance has allocated resources for personnel costs, making a noteworthy decision to appoint executive Steve Christie as its deputy chief compliance officer.
He was appointed after rejoining the company following a period of absence. His return is seen as a move to strengthen the exchange’s compliance efforts, particularly in the wake of regulatory challenges and legal actions.
Christie, who was Binance’s senior vice president of compliance, left the company last summer during a regulatory crisis that led to a $4 billion settlement with US authorities in November.
Richard Teng, who previously served as the head of regional markets at Binance before assuming the role of CEO, emphasized the importance of proactively addressing compliance concerns in the rapidly evolving cryptocurrency landscape.
The move comes at a crucial time for the exchange, as regulatory bodies worldwide are intensifying their scrutiny of the crypto industry.
L
The increased compliance efforts align with ongoing developments in the legal proceedings against Changpeng Zhao (CZ), the former CEO of Binance. The exchange seems to be taking proactive measures to navigate potential regulatory challenges and demonstrate its commitment to regulatory compliance.
CZ has pleaded guilty to various charges, including money laundering and failure to maintain an effective anti-money laundering program. Binance itself has admitted to engaging in anti-money laundering, unlicensed money transmitting, and sanctions violations, leading to a $4.3 billion settlement with the U.S. Department of Justice.
As part of the settlement, CZ resigned as CEO and was expected to pay a $50 million fine, while Binance will pay the remaining amount. The charges against Binance and CZ also include operating as an unlicensed money service business and failing to register with the U.S. Treasury’s Financial Crimes Enforcement Network.
The company’s legal troubles are not limited to the Department of Justice, as the Securities and Exchange Commission (SEC) has also filed charges against Binance and CZ for securities law violations.
