The U.S. government's strong regulatory model for the crypto industry is changing the industry's ecology. As the "chicken" in the "killing the chicken to scare the monkey", Binance, the world's largest cryptocurrency exchange, revealed that the company will increase its investment in compliance.
Last year, the U.S. Securities and Exchange Commission sued Binance and its founder Zhao Changpeng, accusing them of improper handling of customer funds, misleading investors and regulators, and violating securities rules. Binance then appealed to dismiss the case, but a U.S. judge ruled in June that most of the lawsuits would continue.
Zhao Changpeng pleaded guilty and resigned as Binance CEO in November last year. Richard Teng then took over as Binance CEO. In April this year, Zhao Changpeng was sentenced to four months in prison by a U.S. district court.
This is also a typical example of U.S. regulators taking large-scale actions against the crypto industry, and Binance's countermeasure is to comply with regulation. Teng said on Wednesday that it will recruit 1,000 employees this year, most of whom will be assigned to the compliance department. By the end of this year, Binance will have 700 compliance staff, an increase of 200 from the current number.
The Importance of Compliance
Teng has served as a senior executive at the Monetary Authority of Singapore and the Singapore Stock Exchange, and has also served as CEO of the regulator of the Abu Dhabi International Market. He said that he has been a regulator all his life and knows that communication with government agencies is very important.
He revealed that Binance has received more and more requests from global law enforcement agencies, reaching 63,000 this year, which has exceeded the 58,000 requests for the whole of last year. This is the direct reason why Binance attaches more and more importance to compliance.
He also said that Binance's spending on compliance has climbed from US$158 million two years ago to more than US$200 million, and will increase further.
The company is facing compliance monitoring from the U.S. Department of Justice and the U.S. Treasury Department's Financial Crimes Enforcement Network, and the supervisors arranged have already started working, but for Binance, this is just the beginning. These supervisors will keep a close eye on Binance's financial statements and transaction traces.
After Teng took office, Binance also reformed its cooperation with major brokers, tightened the requirements for the listing of new digital tokens, and divested its venture capital department.
However, despite the regulatory headwinds, Binance's business is still profitable, and it is also considering expansion plans in Dubai, Abu Dhabi and other cities. Teng also pointed out that Binance will also recruit customer service staff this year to adapt to the rebound of the crypto market after the 2022 bear market.
Alex
TheBlock
cryptopotato
Bitcoinist
Others
Cointelegraph