Binance, the world’s largest cryptocurrency exchange, has significantly increased its year-over-year spending on compliance, allocating $213 million from its previous $158 million to bolster its legal-related efforts. This move comes as the exchange faces regulatory challenges and strives to enhance its compliance culture.
Compliance Focus
The increased spending reflects Binance’s commitment to compliance, contrasting its earlier approach when it gained industry prominence with a more relaxed stance. CEO Richard Teng, who took over after ex-CEO Changpeng ‘CZ’ Zhao in November, highlighted the exchange’s maturing compliance culture and gave credibility to talents, saying – “This is made possible with the quality of our talent who continue to meet the new challenges and opportunities of this exciting and fast-evolving industry.”
The increased compliance spending includes personnel costs, such as bringing back executive Steve Christie as deputy chief compliance officer. Christie emphasized the compliance culture at Binance is ‘stronger than ever’, citing the presence of chief compliance officer Noah Perlman, a former global head of financial crimes at Morgan Stanley.
Settlement and Monitoring
In late November last year, Binance settled with the U.S. DOJ, agreeing to pay over $4 billion in fines and penalties. As part of the settlement, the exchange will accept a court-appointed monitor to ensure adherence to terms imposed by the Department of Justice, Financial Crimes Enforcement Network, and the Office of Foreign Assets Control.
Despite regulatory challenges, Binance reported significant financial success, pulling in over $3.5 billion in new funds in January. The exchange’s total assets now exceed $80 billion, showcasing resilience and growth despite regulatory headwinds.
Achievements
In 2023, Binance welcomed 40 million new users, marking a 30% increase, bringing its total user base to over 170 million. The exchange saw a surge in Binance Pay usage and P2P services. Additionally, compliance efforts were evident, with over 60,000 requests from global regulatory authorities addressed and more than 120 compliance training sessions conducted for personnel.
Summing it Up …
Binance’s focus on strengthening compliance signifies a shift from its easy stance earlier, emphasizing a commitment to regulatory standards. The exchange’s financial success and increased user base in the 2023 Report showcase can be seen as a good sign even when the company has faced severe legal troubles.
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Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.
