Binance Holdings, the world’s largest cryptocurrency exchange, is intensifying its efforts to meet regulatory requirements by hiring an additional 1,000 employees this year, with a significant number of these new hires dedicated to compliance roles. This move comes as the company’s annual spending on regulatory compliance, including oversight from United States authorities under a recent plea deal, surpasses $200 million.
In an interview with Bloomberg News in New York on August 21, Binance CEO Richard Teng, who is currently in the U.S. to engage with monitors and officials, outlined the exchange’s strategic focus on compliance. “I have been a regulator all my life,” Teng said, emphasizing the importance of government agencies in the regulatory landscape. While Teng declined to confirm whether he had met with officials from the Securities and Exchange Commission (SEC) during his visit, he noted that compliance remains a top priority for the platform.
The SEC, which is suing Binance for alleged mishandling of customer funds, misleading investors and regulators, and violating securities laws, was not part of the plea deal reached with the U.S. Department of Justice (DOJ) and other agencies. That settlement, which included a $4.3 billion penalty, was imposed on Binance for enabling criminal activities and terrorism financing through its platform. As part of the deal, Binance is now subject to years of compliance monitoring by the DOJ and the U.S. Treasury’s Financial Crimes Enforcement Network.
Teng revealed that Binance plans to expand its compliance team to 700 employees by the end of 2024, up from approximately 500 currently. This marks a significant investment in regulatory oversight, with compliance spending having risen from $158 million just two years ago. Teng, who has previously held senior regulatory roles at the Monetary Authority of Singapore and the Abu Dhabi Global Market, highlighted the growing number of requests Binance receives from law enforcement agencies worldwide. These requests have surged to 63,000 so far this year, compared to 58,000 in 2023.
The compliance monitoring mandated by U.S. agencies is already underway, with Forensic Risk Alliance and Sullivan & Cromwell appointed as independent monitors. “They are going to do an assessment,” Teng said, adding, “We are very early in the journey.”
Despite the ongoing legal challenges, Binance remains committed to defending itself against the SEC’s accusations. In June, a judge ruled that most of the SEC’s lawsuit against Binance and its billionaire co-founder, Changpeng “CZ” Zhao, could proceed. Zhao, who stepped down as CEO as part of the plea agreement, was sentenced to a four-month jail term.
Under Teng’s leadership, Binance has made significant adjustments, including changing its approach to working with prime brokers, tightening requirements for listing new digital tokens, and spinning off its venture arm. However, the company has yet to establish a global headquarters or release a fully audited set of accounts. Teng confirmed that the business remains profitable and that Dubai, Abu Dhabi, and another undisclosed city are being considered as potential locations for Binance’s global headquarters.
Binance, which currently employs over 5,000 staff, continues to navigate a complex regulatory environment as it strives to maintain its position as a leading player in the global cryptocurrency market.
