Binance Makes Regulatory Compliance Top Priority as the Crypto Exchange Pivots Into Financial Services Company
Global cryptocurrency exchange Binance has made regulatory compliance its top priority. The exchange is on a hiring spree to “significantly” add to its compliance and legal teams. “We are going through a pivot from a technology innovator into a financial services company, so we need to be fully compliant,” said the CEO of Binance.
Binance’s Regulatory Compliance Plans
Binance is focusing on regulatory compliance as the exchange pivots from a technology startup into a financial services company, CEO Changpeng Zhao (CZ) explained in an interview with Bloomberg TV Tuesday.
Commenting on crypto regulatory efforts in the U.S., he said: “The U.S. is very mature on the crypto regulation part. They are leading now. They have a cryptocurrency exchange listed on Nasdaq which is very positive.” The executive continued:
When the new crypto regulations come in, many of them will be somewhat restrictive. That’s kind of expected. But over time, we do think that regulations will adjust with market demand, and hopefully will get better.
“I believe, right now, all the regulators around the world view crypto as financial instruments one way or another,” he further opined.
The CEO said that he spends almost all of his time, which is “probably 80% or more,” on compliance, noting that he is “not really involved in the day-to-day operations of the exchange.”
We are going through a pivot from a technology innovator into a financial services company, so we need to be fully compliant.
He named some priorities Binance is focusing on in order to become compliant. “We have to hire a lot more people,” he began. “We need to hire people with regulatory compliance experience and very senior people that can bring teams in. We need to significantly … increase the size of our compliance, legal teams.”
Binance announced Wednesday that it has hired Greg Monahan, former U.S. Treasury Criminal Investigator, who joins the organization as a Global Money Laundering Reporting Officer (GMLRO).
Earlier this month, former acting Comptroller of the Currency, Brian Brooks, stepped down as the CEO of Binance US due to “differences over strategic direction.”
Zhao also explained that Binance needs to ditch its decentralized vision. “We were shooting for the decentralized organizational structure which does not work with regulators … Now, we are establishing headquarters, proper structures, proper governance, proper audits, etc.”
Furthermore, the CEO said: “We need to make sure that all of our products are fully compliant … This is why we’ve been limiting our futures, derivatives products in most of Europe and some parts of Asia as well.”
Next, he said Binance needs “to apply for licenses,” emphasizing that it is “very important” for the company “to communicate with the regulators” and “request regular meetings where we proactively update them on what we do.”
A number of regulators worldwide recently issued warnings about Binance. They include regulators in the U.K., Japan, Malaysia, Thailand, Germany, Cayman Islands, Lithuania, and Hong Kong.
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