Binance Engages in Talks with US Regulators Following Admission of Regulatory Shortcomings

Following increased scrutiny from US regulators on the cryptocurrency industry, the Chief Strategy Officer (CSO) at Binance, Patrick Hillmann, has confirmed that the exchange had lapses in regulatory compliance. In an interview with The Wall Street Journal, Hillmann acknowledged that the shortfalls mainly occurred during the implementation of the exchange’s security measures, specifically in relation to the Know Your Customer (KYC) protocol and Anti-Money Laundering (AML) rules.

Hillmann noted that Binance has since handled the lapses in its protocols and workforce security, having increased its workforce by over 750 additional staff within the past two years, and hiring Noah Perlman as its new chief compliance officer. Some American regulators, including 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), have been investigating Binance due to its compliance rule flaws. The regulators have been probing the exchange’s business structure and financial reserves within the past few years.

Hillmann disclosed that Binance is currently in discussions with regulators for possible settlement, aiming to reach a common ground that would stop the regulators from further probing Binance’s operations within the United States. Despite the regulatory setbacks, Binance has been improving its functionalities to achieve its global growth plans, having addressed the lapses in compliance and cybersecurity by increasing the number of staff in their compliance team.