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Highlights
- Binance to focus on regulatory compliance and hire more people for compliance roles.
- Richard Teng reveals the crypto echange plans to hire 1000 employees this year.
- Compliance costs to likely surpass even legal costs for Ripple to defend the SEC lawsuit.
Binance, the world’s largest crypto exchange, plans to spend big on meeting all aspects of compliance after the recent conflicts with regulators globally. Binance Holdings plans to hire 1,000 people this year with many dedicated to compliance roles. The company plans to spend more than the total costs Ripple incurred in fighting against the SEC lawsuit.
Binance to Focus on Regulatory Compliance
In a Bloomberg interview, Binance chief executive officer (CEO) Richard Teng talked about meeting regulatory compliance and the exchange’s hiring goals this year.
“I’ve been a regulator all my life,” Teng said. He agreed that “Government agencies are important.” The firm faces rising costs due to compliance monitoring by the DOJ and the US Treasury’s Financial Crimes Enforcement Network. The earlier plea deal with the Justice Department and other US agencies included a $4.3 billion penalty for money laundering violations and compliance issues.
Spending on compliance surpassed $200 million from $158 million two years ago. Richard Teng says costs set to increase further as monitors appointed by the US agencies, Forensic Risk Alliance and Sullivan & Cromwell, have already started work.
Binance’s compliance spending to exceed even higher than Ripple Labs’ net costs in the Ripple vs SEC lawsuit. CEO Brad Garlighouse earlier said defending against the SEC lawsuit has cost the company $200 million. The court has ordered the company to pay $125 million in penalties for violation of securities laws in XRP sales to institutions.
Crypto companies in total have spent billions in compliance or settlement with regulators. This has become a major setback for the industry amid a lack of regulatory clarity and clear guidelines from regulators. Crypto has taken the front seat in the US presidential election.
Crypto Hiring Indicates Bullish Sentiment
After Changpeng “CZ” Zhao stepped down from CEO position at Binance, Richard Teng has worked with prime brokers, tightened requirements for new crypto listings, and spun off its venture arm Binance Labs. The company plans to have 700 employees in compliance roles by 2024 end.
In addition, Teng said they will continue to fight against allegations in the SEC lawsuit. A judge recently ordered that most arguments against Binance and its co-founder CZ will proceed.
Crypto companies such as Tether also announced plans to increase their workforce. Tether CEO Paolo Ardoino revealed plans to double its workforce, hinting at market recovery.
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