"Our capital structure is debt-free, expenses are modest, and, despite the low fees we charge our users, we have robust revenues and profits." "The fundamentals of our business are VERY strong," Teng posted on social media on Wednesday. Still, Binance should be able to cover both additional compliance costs and the U.S. While the exchange has said it has ramped up compliance spending, Zhao for years sought to shield it from regulators, Reuters reported in a series of articles in 2022. "It's a real millstone - everything you are doing is subject to scrutiny," said John Reed Stark, a former chief of the SEC's Office of Internet Enforcement. Such steps are unusual, challenging and costly, even for mainstream financial companies with deep experience of dealing with regulators, said lawyers and former regulators. Zhao's lawyers did not respond to a request for comment.Īs part of the resolution, the US authorities will subject Binance to five years of "financial monitorship" overseen by the US Treasury's Financial Crimes Enforcement Network (FinCEN).įinCEN will keep access to Binance's books, records and systems, "oversee remedial undertakings" needed to address Binance's non-compliance with anti-money laundering and sanctions rules, the Treasury said on Tuesday. "Richard was hired two years ago to help Binance mature and move past these historical issues," Matthews said, adding that Binance had "worked hard to restructure our organization and personnel and upgrade our systems." The firm has "new leadership" in place with experience in compliance, law enforcement and major corporations, he added. Contacted by Reuters with a summary of this article, Binance did not make Teng available for an interview.īinance spokesperson Simon Matthews told Reuters that Binance had lacked "compliance controls adequate for the company that it was quickly becoming" and made "misguided decisions" as it grew quickly.
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