The Chief Strategy Officer (CSO) of Binance confirms that the company has faced some compliance issues years after its launch in 2017. The company is now discussing with US regulators about a possible level.
US regulators have recently tightened their grip on the cryptocurrency industry. They have their eyes on the world’s largest cryptocurrency exchange Binance while scrutinizing most of the companies.
Binance has acknowledged that there are loopholes in regulatory compliance
During an interview with The Wall Street Journal, Patrick Hellman of Binance CSO highlighted Stock exchange loopholes in regulatory compliance. He explained that the gaps occurred mainly during the implementation of the stock exchange’s security measures. It included rules related to Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols.
The CSO confirmed that Binance has already addressed the vulnerabilities in its protocols and workforce security. He pointed out that such issues emerged two years after the launch of the platform. But Binance is improving its functionality to achieve global growth plans.
Hillman explained that some of the shortcomings were due to a lack of staff to oversee compliance and cybersecurity while maintaining expansion activities. But the Central Statistical Office reports that they have completed all the necessary adjustments by increasing the number of staff in their compliance team.
The cryptocurrency exchange has increased its workforce by hiring more than 750 additional employees over the past two years. Also, the CBS mentioned that Binance has hired Noah Perlman as its new Chief Compliance Officer. Perelman previously worked with Gemini as Chief Operating Officer.
Binance is discussing with regulators to settle
Some US regulators have been investigating cryptocurrency exchanges for flaws in compliance rules. Regulators include the US Securities and Exchange Commission (SEC), Department of Justice (DOJ), Commodity Futures Trading Commission (CFTC), and Internal Revenue Service (IRS). They are investigating the stock exchange’s business structure and financial reserves over the past few years.
Hillman revealed that the exchange is currently discussing with regulators a possible settlement. He noted that finding common ground would prevent observers from investigating Binance’s operation in the United States.
The CSO stated that it will keep the details of the discussion between Binance and regulators private. However, the organizers will decide what they intend to do. They can slam the stock exchange with a penalty or pay an exorbitant price as a remedy.
Also, Heilman noted that Binance is going to great lengths to ensure that the outcome will not affect users but rather benefit them. He stated that the exchange wants to remove all regulatory ambiguity and move forward, focusing more on its business.
In another development, CNBC reported that the New York Department of Financial Services Funnel on PaxosBinance USD token issuer. NYDFS orders Paxos to stop issuing new BUSD coins. The blockchain company has confirmed that it will stop minting new BUSD coins but will still manage stablecoin refunds from customers.
Featured image from the Binance blog, chart from TradingView