Binance Boosts Compliance Team, Spending $200M Amid SEC Legal Challenges

In a strategic move to fortify its commitment to regulatory compliance, Binance Holdings has announced an expansive recruitment drive, aiming to add 1,000 new employees to its ranks throughout the year. This surge in hiring, with a significant portion allocated for compliance roles, comes as Binance's annual spending to uphold regulatory standards, especially under United States oversight, surpasses an impressive $200 million mark.

During a recent interview with Bloomberg News in New York, Binance's CEO Richard Teng detailed these ambitious objectives. Teng, who brings to the table an extensive history of regulatory roles, including assignments at the Monetary Authority of Singapore and the Abu Dhabi international financial center, is currently in the US for discussions with monitors and officials. Despite the intense scrutiny, Teng remained reticent on the specifics of his engagements, especially regarding any interaction with the Securities and Exchange Commission (SEC), which currently has unsettled legal disputes with Binance.

The expansion of Binance's compliance workforce is set to be substantial. By the end of 2024, the company plans to ramp up its compliance team to a robust 700-member unit, ascending from its present strength of about 500. This targeted growth reflects Binance's response to an increased volume of inquiries from law enforcement agencies worldwide, with a notable increase to 63,000 requests this year alone.

Striding towards heightened fiscal scrutiny, Binance has welcomed monitors appointed by US agencies, including Forensic Risk Alliance and Sullivan & Cromwell. Their task involves the meticulous assessment of the exchange's financial operations and transaction tracking, a testament to the stringent path of compliance Binance is committed to trekking.

Despite these efforts, the shadow of ongoing litigation with the SEC, alongside an extensive $4.3 billion penalty from the Justice Department for compliance failures, looms over Binance. However, Teng reaffirms that the firm will persist in contesting the SEC's allegations of customer fund mismanagement and regulatory breaches.

Notably, Teng ascended to Binance's leadership in the wake of Changpeng "CZ" Zhao's relegation to a lesser role as per the US plea deal's terms. Teng's tenure has seen proactive adjustments in Binance's operations, yet the complete disclosure of audited accounts remains elusive, and a formal global headquarters is still to be announced.

The crypto community watches as Binance navigates these insidious waters, heightening its arsenal with a welcome inflow of new talent, increased regulatory spending, and a firm stance against ongoing legal challenges. This story not only echoes Binance's prowess but also encapsulates the broader crypto industry's cautious dance with regulatory compliance and the striving for transparent, accountable operations.