Binance Announcement Reaching a Solution with US Regulatory Agencies

Binance's Announcement Resolving Issues with US Regulatory Agencies

Source: Binance; Compilation: Song Xue, Lian Guai

Today, we are pleased to inform you that we have reached resolutions with the U.S. Department of Justice, Commodity Futures Trading Commission, Office of Foreign Assets Control, and Financial Crimes Enforcement Network regarding their historical registration, compliance, and sanction investigations. These resolutions recognize our company’s responsibility for historical, criminal compliance violations and allow us to turn the page to a challenging yet transformative chapter of learning and growth. With the enhanced compliance and governance reflected in our commitments, we can now share our vision for the exciting future of Binance and the cryptocurrency industry. We believe that Binance will become a stronger company laying the foundation for the next 50 years.

Although Binance is not perfect, it has been committed to protecting users since its inception and has made significant efforts in security and compliance. However, when Binance first launched, it did not provide adequate compliance controls for its rapidly growing company, which it should have. Binance has grown at an incredibly fast pace globally, in an emerging industry going through early stages of regulation, but it made wrong decisions during this process. Today, Binance takes responsibility for its past actions.

Over the past two years, we have worked on organizational restructuring, personnel adjustments, and system upgrades. Our new leadership possesses extensive compliance experience and impressive backgrounds, ranging from top-tier traditional financial institutions and leading technology companies to law enforcement agencies and major corporate entities. It is through this process that we have provided users with a stronger, safer, and more secure platform.

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Equally important, we have always firmly upheld the core values of user safety. We place great importance on our responsibilities as custodians and maintain 1:1 backing for every user’s assets.* This means that users can withdraw 100% of their assets from the platform at any time. It is worth noting that in our resolution with U.S. agencies, they:

• Do not charge Binance with misappropriation of any user funds, and

• Do not charge Binance with any market manipulation.

Our global leadership team has laid the foundation for Binance’s long-term growth. Our focus is on protecting our users and building a platform for the next few decades. This dedication and experience bring additional resilience, allowing us to continue operating on behalf of our users not just for the next five years, but for the next fifty years or even longer. Our former CEO remains a major shareholder of Binance and a consulting resource for our business history.

Positioning for the next fifty years means understanding the current challenges of cryptocurrency and striving to develop industry-leading standards to address these challenges, including compliance, security, collaboration with law enforcement, and user transparency.

Due to these updates and our collaboration with global regulatory agencies, Binance is now stronger than ever. We have learned valuable lessons that apply to the entire industry in order to support cryptocurrency users. We recognize that, in challenging market conditions and poorly managed industries, transparency is crucial for rebuilding industry confidence, in addition to compliance. Building on past experiences, we are proud to be making some of the most important investments in compliance, security, and transparency among all companies in the industry.

Leadership Changes

Richard Teng, former CEO of Global Markets at Binance, has taken over as CEO, effective immediately. Richard is a highly qualified leader with over thirty years of experience in financial services and regulation. He will lead the company through the next phase of growth. Prior to joining Binance, Richard served as CEO of Abu Dhabi Global Market Financial Services Regulatory Authority; Chief Regulatory Officer of Singapore Exchange (SGX); and Director of Corporate Finance at the Monetary Authority of Singapore.

Compliance and Security

Binance has been systematically reorganizing our organization and personnel, upgrading our systems, and establishing new industry compliance standards. For example, we have updated and expanded our internal anti-money laundering (AML) detection and analysis capabilities. Binance’s AML compliance has now become an industry standard, and Binance will continue to improve its comprehensive anti-money laundering policy. Binance also plays a crucial leadership role in assisting law enforcement agencies in combating cyber and financial crimes as well as terrorism.

Binance is one of the first major exchanges outside the United States to require mandatory implementation of KYC procedures for all users. Today, potential users (who are not US citizens) must provide valid identification and submit a “selfie” photo, which is verified against their identity with the support of world-class vendors. Binance also conducts searches through World-Check to identify any criminal records, links to terrorism, politically exposed persons (PEP) lists, and sanction watchlists. Additionally, Binance utilizes real-time and post-trade monitoring tools to detect and block suspicious transactions. In recent years, Binance has invested significant resources to strengthen its compliance program. Today, Binance welcomes a new leadership team with deep compliance backgrounds, overseeing a team of hundreds of compliance support personnel, including more than 60 individuals with law enforcement or regulatory experience, and over 200 individuals with compliance professional certifications, including certified anti-money laundering experts. In addition to the core compliance team, Binance has also hired hundreds of specialized operational, product, and technical staff that support the development and execution of the company’s compliance plans.

Binance takes sanctions compliance seriously and has an independent sanctions team in place to ensure the organization is in full compliance with global sanctions rules. Binance has also dedicated significant resources and efforts to comply with sanctions regulations. Today, in addition to KYC and IP blocking, Binance voluntarily implements controls and restrictions related to US and other countries’ sanction laws using advanced third-party tools, including real-time on-chain sanction transaction monitoring and screening.

Law Enforcement Cooperation

Binance has also employed multiple teams that regularly interact with law enforcement agencies and officials, with more than 70 members in total. Binance has identified and actively assisted law enforcement agencies in resolving national security-related issues in various countries, including the United States. Additionally, from January 1, 2023 to November 13th, Binance processed over 52,700 law enforcement requests through its government request system, serving 12,699 registered law enforcement officers worldwide. Furthermore, in 2022 alone, the Binance team handled over 50,000 requests.

Binance actively shares knowledge with law enforcement agencies. In 2022, Binance hosted and participated in over 70 seminars and training sessions for law enforcement officers combating online and financial crimes worldwide. Building on these efforts, Binance announced a formal global law enforcement training program in September 2022, aimed at helping law enforcement agencies identify and combat financial and cybercrimes.

In 2023, our dedicated law enforcement training team, with the support of the investigation team, conducted 120 on-site or online training sessions and seminars, all of which received extremely positive responses from the law enforcement community.

Binance is proud to be one of the most important global law enforcement partners in the fight against illegal financial activities.

Commitment to Transparency

Binance takes great care in protecting its customers’ assets. Users can withdraw 100% of their assets from the platform at any time. As part of the commitment to transparency, Binance shares its cold and hot wallet addresses and publishes Merkle tree reserve proofs and B-token collateral proofs.

Binance has also established user safety measures, such as the Margin Insurance Fund, to protect users from losses when the cross/isolated margin net value falls below zero or when users are unable to repay their debts. Binance is one of the first cryptocurrency exchanges to have a Safety Asset Fund for Users (SAFU) to protect users in extreme cases. Binance has publicly disclosed the wallet address of SAFU.

Binance combines its security measures with an education program to empower users to protect themselves and gain a better understanding of the cryptocurrency ecosystem. As part of the commitment to advancing cryptocurrency education for all, Binance has published over 430 articles on the Binance Academy, as well as cryptocurrency-related glossaries in 30 languages and in-depth courses. Binance also collaborates with over 70 universities in 25 countries to provide cryptocurrency and Web3 knowledge and partners with local organizations to launch anti-fraud campaigns, helping users identify and avoid scams.

The Future of Cryptocurrency

We firmly believe that the cryptocurrency industry and Binance have a bright future.

We have built a community and ecosystem that empowers individuals to harness the power of blockchain technology to create opportunities for their families, communities, and economies around the world. We are committed to ensuring that more people globally experience the transformative power of these technologies.

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