As a seasoned analyst with extensive experience navigating the complex landscape of regulatory compliance and cryptocurrency markets, I find Binance’s commitment to beefing up its compliance team quite intriguing.
In a move to address global regulatory issues following recent clashes, Binance, the leading cryptocurrency exchange worldwide, intends to invest heavily in meeting all compliance requirements. This year, Binance Holdings aims to recruit approximately 1,000 new employees, with many being assigned to compliance-related positions. The company’s investment in compliance is expected to surpass the total expenses Ripple faced during their legal battle against the SEC lawsuit.
Binance to Focus on Regulatory Compliance
As a crypto investor, I’ve been keeping an eye on updates from Binance, and in a recent interview with Bloomberg, their CEO, Richard Teng, discussed their focus on meeting regulatory requirements and achieving hiring targets for this year.
Teng, in his own words, shared that he’s spent his entire career as a regulatory figure. He acknowledged the significance of government agencies. His firm has been grappling with escalating expenses because they are under constant scrutiny by entities like the Department of Justice (DOJ) and the Financial Crimes Enforcement Network within the U.S. Treasury. Previously, they had entered into a plea bargain with the Justice Department and other American agencies, which resulted in a fine of $4.3 billion for money laundering infractions and compliance-related issues.
Over the past two years, expenditure on compliance has grown significantly from $158 million to over $200 million. According to Richard Teng, these costs are expected to rise even more as the appointed monitors by US agencies, Forensic Risk Alliance and Sullivan & Cromwell, have commenced their work.
Binance’s compliance expenses are projected to surpass Ripple Labs’ total expenditures related to their lawsuit against the SEC. Previously, CEO Brad Garlinghouse stated that defending against this lawsuit has already cost the company approximately $200 million. However, a court ruling mandates Ripple to pay a fine of $125 million for violating securities laws in the sale of XRP to institutions.
1. In aggregate, crypto firms have expended billions to comply with regulations or settle disputes with regulatory bodies, which poses a significant challenge due to the absence of definitive rules and comprehensive guidance from these entities. Meanwhile, cryptocurrency has emerged as a prominent issue in the ongoing U.S. presidential election.
Crypto Hiring Indicates Bullish Sentiment
Following Changpeng “CZ” Zhao’s departure from the CEO position at Binance, Richard Teng has collaborated with prime brokers, strengthened criteria for new cryptocurrency listings, and separated its venture arm, Binance Labs. The company aims to have around 700 employees in compliance roles by the end of 2024.
Moreover, Teng stated they plan to keep contesting the charges brought forth in the SEC lawsuit. Recently, a judge decided that the majority of disputes involving Binance and its co-founder CZ should move forward.
Cryptocurrency firms like Tether are intending to expand their teams too. In fact, Tether’s CEO, Paolo Ardoino, has disclosed ambitions to double the current staff size, suggesting a potential rebound in the market.
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2024-08-22 11:32