Binance, the world’s biggest crypto exchange, had earlier “gaps” in its regulatory compliance that have since been closed, Chief Strategy Officer Patrick Hillmann said in an interview.
(Bloomberg) — Binance, the world’s biggest crypto exchange, had earlier “gaps” in its regulatory compliance that have since been closed, Chief Strategy Officer Patrick Hillmann said in an interview.
An initially small staff was stretched thin as the company tackled international expansion, compliance and cybersecurity after starting up in 2017, he said.
“It’s a tremendous burden,” Hillmann said Wednesday. “As a result, there were some gaps in our compliance system in the first two years.”
Hillmann said Binance is in settlement discussions with US regulators but added he can’t provide a time-line or potential settlement amounts. In an interview with the Wall Street Journal, Hillmann said remediations will be “likely a fine, could be more….We just don’t know. That is for regulators to decide.”
The Department of Justice, Internal Revenue Service, the Securities and Exchange Commission and Commodity Futures Trading Commission have been probing Binance over the last few years. The exchange has also faced calls for more transparency about its asset reserves and corporate structure.
Hillmann said Binance can’t discuss “ongoing conversations” with regulators, while adding that they have been “very collaborative.”
“It’s greatly to the benefit of users,” he said. “We just want to put it behind us.”
The DoJ, IRS, SEC and CFTC didn’t immediately reply to requests for comment sent outside regular business hours.
In January, Binance was named among counterparties to digital-asset platform Bitzlato, which has been accused of processing millions of dollars in illegal funds.
This month, a New York regulator told Binance’s partner Paxos Trust Co. to stop minting a Binance-branded stablecoin known as BUSD. The regulator told Paxos to halt new issuance over unresolved issues tied to Paxos’s oversight of its relationship with Binance. The SEC separately has sent Paxos a notice alleging that BUSD, the third-largest stablecoin, is an unregistered security.
Binance’s team of compliance experts has expanded dramatically over the last two years to more than 750, Hillmann said. The company recently hired a new chief compliance officer, Noah Perlman, who was previously chief operating officer at Gemini Trust, a smaller crypto exchange.
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