Crypto Compliance: Binance’s Teng Lays Out Strict New Crypto Rules

Embattled leading global cryptocurrency exchange Binance has agreed to a set of strict new compliance rules as part of a recent settlement with U.S. regulators. This development comes on the heels of founder Changpeng Zhao (CZ) stepping down from the CEO role and seasoned financial regulator Richard Teng taking over the helm.

Read more: Binance’s CEO Transition: Navigating the Crossroads of Cryptocurrency in a Post-Penalty Era

As one of his first acts as new Binance CEO, Teng has committed to transforming Binance from a tech startup into a regulated financial institution. This process involves establishing a global headquarters, forming a board of directors, and implementing comprehensive compliance procedures company-wide.

Crypto Compliance: Binance's Teng Lays Out Strict New Crypto Rules

According to Teng,

“Fines are not uncommon in the financial industry. Binance is now likely the most regulated exchange globally with huge focus on compliance.”

Binance’s 2023 annual report reveals the company spent $213 million last year to promote compliance and obtained relevant licenses in multiple jurisdictions.

But why is an unregulated crypto exchange suddenly so fixated on compliance, and what specific rules can users and industry participants expect Binance to now follow?

Binance’s Rocky Regulatory History

Crypto regulation in the U.S. remains piecemeal at best, with agencies resorting to retroactively applying decades-old laws. Binance unfortunately found itself targeted by prosecutors as an example.

According to authorities, Binance failed to adhere to basic compliance fundamentals during its early U.S. expansion. Specific allegations include operating without proper registration or implementing proper anti-money laundering checks.

However, unlike collapsed rival FTX, Binance was not accused of directly mishandling user funds. And despite worries of an existential crisis, user assets remained protected while the company continued functioning normally.

Nonetheless, Binance was compelled to settle and pay substantial fines. As part of the agreement, it must now commit to abiding by strict compliance stipulations if it hopes to secure regulators’ approval to fully service the coveted U.S. market in the future.

Richard Teng’s Crypto Compliance Prescription

This is where freshly appointed CEO Teng enters the picture. With 30 years of financial regulatory experience, including senior roles in Abu Dhabi, Singapore, and most recently as Binance’s Global Markets Regional Officer, few match his credentials for guiding Binance’s compliance overhaul.

In public statements, Teng has emphasized cooperation with policymakers to develop unified global crypto compliance standards. This represents a monumental but necessary undertaking if crypto and decentralized finance are to fulfill promises of financial access and inclusion.

Internally, Teng is directing teams globally to instill best compliance practices covering every aspect of Binance’s operations, especially “know your customer” (KYC) and anti-laundering protocols. With regulators including independent monitors per the settlement, Teng is essentially treating Binance like any major traditional financial institution from a compliance perspective.

What Binance’s Compliance Commitment Means for Users

What Binance’s Compliance Commitment Means for Users

For regular Binance users, Teng’s compliance agenda will likely translate into minor inconveniences like more rigorous upfront KYC checks when opening accounts. Binance could also restrict access to certain advanced trading features for users in jurisdictions with limitations.

However, experts believe these measures may help cryptocurrency gain mainstream credibility and trust long-term. As Teng notes, clearer regulation should attract increased institutional investment, benefiting adoption and innovation across decentralized finance.

By prioritizing playing by the rules instead of intelligence-insulting denial or avoidance gimmicks as crypto cowboys of old, Binance under Teng projects confidence and seriousness befitting an industry leader.

If Binance proves compliance and running a responsible global crypto business can coexist, regulators lose their most convenient attack vector. And in that scenario, Binance cementing compliance leadership could positively impact the entire cryptocurrency ecosystem’s advancement.

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