By Valerie Atoh
Following the launch of Binance in 2017, the firm’s Chief Strategy Officer (CSO) acknowledges that compliance issues arose. The company is currently engaging with US regulators to establish a level playing field.
As of late, the cryptocurrency industry has faced intensified regulatory scrutiny by US authorities. Notably, Binance, the world’s largest crypto exchange, has come under the microscope alongside numerous other firms.
Binance Acknowledges Failures in Regulatory Compliance
In a recent interview, Patrick Hillmann, the Chief Strategy Officer of Binance, admitted that the exchange had failed to meet regulatory compliance requirements, particularly with regards to Know Your Customer (KYC) protocol and Anti-Money Laundering (AML) rules. Hillmann attributed the lapses to the exchange’s implementation of security measures during its early days.
Hillmann confirmed that Binance has since taken measures to address these lapses in protocols and workforce security, which were more prevalent in the exchange’s early years. However, Binance has been working on improving its functionalities in order to achieve its global growth ambitions.
Hillmann explained that some of the shortcomings were due to a shortage of personnel to oversee compliance and cybersecurity while expanding their operations. Nevertheless, the CSO stated that Binance has resolved these issues by increasing the number of compliance staff.
Also read:Binance Engages with Regulators to Reach a Settlement
Following the discovery of compliance issues, Binance has come under investigation by US regulatory bodies such as 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). These regulators are scrutinizing the exchange’s business structure and financial reserves over the past few years. As a result, Binance is in discussions with regulators to reach a settlement.
Hillmann stated that the details of the discussions between Binance and regulators would remain confidential. The decision on how to proceed would ultimately be in the hands of the regulators, who could levy a fine or require significant financial compensation as a remedial measure.
Hillmann emphasized that Binance is working diligently to ensure that any regulatory outcome would not adversely impact users but, rather, provide benefits to them. He stated that the exchange is committed to resolving any regulatory ambiguity and focusing on its business goals moving forward.
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