Binance, the world’s largest crypto exchange, has revealed a substantial year-over-year increase in its spending on compliance measures, according to a recent report. The company has escalated its budget from $158 million to $213 million, signaling a 35% surge, as it invests in cutting-edge software systems designed to identify and report suspicious transactions.
This move comes as Binance braces for the monitoring process and the impending sentencing of its former CEO, Changpeng Zhao. The increased compliance expenditure encompasses not only the acquisition of advanced software but also includes personnel costs. Notably, the exchange has brought back executive Steve Christie, appointing him as Deputy Chief Compliance Officer.
Binance’s CEO, Richard Teng, emphasized the transformation of their compliance culture, attributing the progress to the caliber of talent within the organization. Teng, who assumed the CEO role in November, is a former regulator, steering the company towards a more robust compliance framework.
This strategic focus on compliance marks a significant shift for Binance, considering its earlier laissez-faire approach that contributed to its dominance in the industry. Last year, the exchange reached a settlement with U.S. authorities, ending various investigations.
As part of the settlement terms, the exchange is obliged to accept a court-appointed monitor. The monitor, yet to be officially appointed, will ensure adherence to terms stipulated by the Department of Justice, the Financial Crimes Enforcement Network, and the Office of Foreign Assets Control – all divisions of the U.S. Treasury.
Binance Financial Resilience Amidst Challenges
The impending monitor appointment is expected to curb any questionable tactics that may have contributed to Binance’s market share growth in the past. Despite these challenges, the exchange reported impressive financial figures for January, pulling in over $3.5 billion in new funds and boasting total assets on the platform exceeding $80 billion.
Steve Christie, the returning executive, expressed confidence in the exchange’s strengthened compliance culture. He highlighted the unparalleled technological arsenal at the company’s disposal for compliance, due diligence, and transaction monitoring. Christie’s return to Binance follows a personal break with his family.
Christie said:
The amount of tech Binance has for compliance, due diligence, and transaction monitoring is unparalleled. There’s more tech at your fingertips than anywhere I’ve worked.
However, Binance seems poised to navigate the challenges ahead as the crypto industry undergoes regulatory transformations, bolstered by increased compliance measures and a strong leadership team.
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