Crypto exchange Binance to double size of compliance team; founder responds to global regulatory scrutiny

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July 07, 2021 9:11 PM

Last month, the UK had banned Binance operations in the country. Likewise, Japan, Thailand, Canada, Germany, and Cayman Islands have also warned the world's largest cryptocurrency exchange.

Zhao said the company has implemented new controls and regulation technology with partners such as CipherTrace to instill further protections for its users. (Image source: Binance)

Amid growing regulatory heat faced by the world’s largest cryptocurrency exchange Binance, which owns India’s prominent crypto exchange WazirX, the CEO and Founder Changpeng Zhao on Wednesday said the company plans to double the size of its compliance team by end of 2021. Responding to global regulatory scrutiny towards Binance’s operations in multiple countries, Zhao said in a blog post, “Compliance is a journey – especially in new sectors like crypto. The industry still has a lot of uncertainty.” While the four-year-old startup has grown very quickly, Zhao said they haven’t always got everything exactly right, but they are learning and improving every day and hope to clarify and reiterate their commitment to partner with regulators.

Last month, the UK had banned Binance. The country’s markets regulator Financial Conduct Authority had said on its website, “Binance Markets Limited is not permitted to undertake any regulated activity in the UK.” Likewise, Japan, Thailand, Canada, Germany, and Cayman Islands have also warned Binance. For instance, Thailand’s financial watchdog Securities and Exchange Commission had filed a criminal complaint against Binance last month. It said in a statement that the company has been operating a digital asset business without a license. Similarly, Japan’s Financial Services Agency had said that Binance was operating in the country without permission.

Also read: Waiting for Bitcoin slump to end? Here’s when the bear phase is likely to get over

Zhao said that the company has implemented new controls and regulation technology with partners such as CipherTrace to instill further protections for its users. “We’re proud to say that we have cleared multiple external anti-money laundering (AML) audits — a strong validation of our current AML controls and partnerships.” He also highlighted that Binance’s compliance team and advisory board has grown by 500 per cent since last year to have appointments such as former FATF Executive Secretary Rick McDonell and former Head of the Canadian delegation to the FATF Josée Nadeau as compliance and regulatory advisors. Max Baucus, the former US Senator for Montana and US Ambassador to China have also been part of the team.

Early last month, WazirX and its directors Nischal Shetty and Sameer Hanuman Mhatre had received a notice by Enforcement Directorate for contravention of foreign exchange laws involving crypto transactions worth Rs 2,790 crore. “During the course of the investigation, it was seen that the accused Chinese nationals had laundered proceeds of crime worth Rs 57 crore by converting the INR deposits into cryptocurrency Tether (USDT) and then transferring the same to the Cayman Island-based bitcoin exchange Binance on instructions received from abroad,” a statement by ED had said. Shetty, however, had said that the company is in compliance with all applicable laws.

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