The Chief Strategy Officer (CSO) at Binance confirms the firm had some compliance issues years after its launch in 2017. The company is now discussing with the US regulators for a possible level ground.
The US regulators have recently tightened their measures on the cryptocurrency industry. They’ve set their eyes on the world’s largest crypto exchange Binance while scrutinizing most firms.
Binance Admitted Lapses In Regulatory Compliance
During an interview with The Wall Street Journal, Binance CSO Patrick Hillmann highlighted the exchange’s lapses in regulatory compliance. He explained that the shortfalls mainly occurred during the implementation of exchange’s security measures. They involved rules relating to Know Your Customer (KYC) protocol and Anti-Money Laundering (AML).
The CSO confirmed that Binance has already handled the lapses in its protocols and workforce security. He noted that such issues were prominent two years after the platform’s launch. But Binance has been improving its functionalities to achieve its global growth plans.
Hillmann explained that some shortcomings were due to a lack of personnel to oversee compliance and cybersecurity while maintaining their expansion activities. But the CSO reported that they’d completed all the necessary adjustments by increasing the number of staff in their compliance team.
The crypto exchange has increased its workforce by employing over 750 additional staff within the past two years. Also, the CSO mentioned that Binance employed Noah Perlman as its new chief compliance officer. Perlmann was formerly with Gemini as chief operating officer.
Binance Discusses With Regulators For Settlement
Some American regulators have been investigating the crypto exchange due to its flaws in compliance rules. The regulators include the United States Securities and Exchange Commission (SEC), the Department of Justice (DOJ), the Commodities Futures Trading Commission (CFTC), and the Internal Revenue Service (IRS). They probe the exchange’s business structure and financial reserves within the past few years.
Hillmann disclosed that the exchange is currently discussing with the regulators for possible settlement. He noted that reaching a common ground will stop the watchdogs from probing Binance’s operation within the United States.
The CSO mentioned that he would keep the details of the discussion between Binance and the regulators private. However, the regulators would decide what they intend to do. They could slam the exchange with a penalty fine or a huge price payment as remediation.
Also, Hillmann noted that Binance is making great efforts to ensure that the outcome would not affect users but benefits them. He reported that the exchange wants to clear all regulatory ambiguity and forge ahead, concentrating more on its business.
In another development, CNBC reported that the New York Department of Financial Service cracked down on Paxos, the issuer of gave Binance USD tokens. NYDFS ordered Paxos to stop issuing new BUSD tokens. The blockchain firm confirmed that it would stop minting new BUSD tokens but will still manage the redemption of the stablecoin from customers.
-Featured image from Binance Blog, chart from TradingView