Binance to double compliance staff
► Crypto exchange faces a blizzard of global regulatory probes
Cryptocurrency exchange Binance plans on doubling its compliance team by year’s and said it will “humbly welcome more capable talents” as it faces a blizzard of global regulatory probes.
Authorities in Britain, Japan, Germany and Thailand have raised concerns about the exchange, one of the largest, amid a worldwide crackdown on cryptocurrencies this year.
Binance offers spot crypto trading, derivatives, trade in tokenized versions of stocks and its own cryptocurrency, Binance Coin, the fourth-biggest in the world. It also runs an exchange that allows users to trade directly with each other. It has an opaque structure and has rapidly grown into a giant as the popularity of cryptocurrency trading has exploded.
“Binance has grown very quickly and we haven’t always got everything exactly right,” chief executive Zhao Changpeng said in a letter posted on the company website.
The letter is the company’s most fulsome response to the flurry of regulatory attention that has come while monthly trading volumes over the exchange have soared to more than $660 billion in June, according to data from CryptoCompare.
Around the world regulators are worried about criminals using cryptocurrencies as a conduit for money laundering and about investors falling victim to scams in the red-hot sector. Binance has recently faced a string of crackdowns on the platform by regulators globally.
Thailand’s financial watchdog filed a criminal complaint against the cryptocurrency exchange on Friday for operating a digital asset business without a license.
Japan’s regulator said last month that Binance was operating in the country illegally. Germany’s watchdog said in April it risked being fined for offering tokens connected to stocks.
Britain’s financial watchdog last month barred Binance from carrying out regulated activities in the country. Binance has been growing in popularity in Britain, where its app has been downloaded 1.8 million times in 2021, and 2.2 million times in total, according to mobile data firm Sensor Tower.
Zhao made no reference to any such probe but said scrutiny of the mostly unregulated industry showed it was “maturing.”
“The adoption and development of crypto has many parallels with that of the car,” Zhao wrote.
“When the car was first invented, there weren’t any traffic laws, traffic lights or even safety belts. Laws and guidelines were developed along the way,” he said. “Crypto is similar.”
Zhao said Binance’s international compliance team and advisory board had grown “by 500 percent since last year” and planned to double by the end of 2021, without giving figures for intended hires.
Bloomberg has previously reported Binance is also under investigation by the US Justice Department and Internal Revenue Service (IRS). Zhao made no reference to that but said Binance works with law enforcement agencies such as the IRS and had so far “completed assisting 5,600 investigation requests” globally this year, already double the amount from 2020.
“Our vision is to increase freedom and inclusion for a better human society,” Zhao wrote. “We humbly welcome more capable talents and experienced advisers to join us to build better.”
On Tuesday, Binance said it will temporarily suspend euro bank deposits from one of Europe’s key payments networks, according to an email it sent to users.
The email said that from 8 am universal coordinated time on Wednesday, customers would no longer be able to deposit funds through the Single Euro Payments Area, or SEPA, schemes. The move was due to “events beyond our control,” the exchange said in the email.
“Any deposits attempted via SEPA in the meantime will be returned within 7 working days. SEPA withdrawals are unaffected by this suspension,” Binance said.
The network, which is a European Union project that aims to harmonize euro payments across the region, allows consumers to send euros across three dozen countries. Binance typically accesses SEPA through payment intermediaries.
In China, cryptocurrency mining has been subject to an intensifying crackdown over recent months.
A Beijing office of China’s central bank said on Tuesday it had ordered the shutdown of a Beijing-based software maker over its suspected involvement in cryptocurrency trading.
Authorities ordered Beijing Qudao Cultural Development Co to suspend operations, and its website had been deactivated, the Beijing financial supervision administration and a department of the People’s Bank of China said in a statement.
In June, many Bitcoin mines in Southwest China’s Sichuan Province – one of China’s largest cryptocurrency mining bases – were closed. The ban means that more than 90 percent of China’s Bitcoin mining capacity is estimated to be shut down, at least over the short term, as regulators in other key mining hubs in China have taken similar harsh steps.
Bitcoin is created or “mined” by high-powered computers usually at data centers across different parts of the world, competing to solve complex mathematical equations which has received criticism for being highly energy intensive.