‘Compliance is a journey,’ says Binance CEO amid regulatory scrutiny

It’s been a busy couple of weeks for Binance, a crypto exchange that offers support for a wide range of digital currencies. The company was the first digital currency exchange to accept virtual reality-based payments, announced its move to Malta in an effort to tap into the country’s blockchain-friendly regulations and, most recently, announced that its CEO Changpeng ‘CZ’ Zhao will be taking a leave of absence, in order to focus on “regulatory compliance and risk management.”

Binance CEO Changpeng Zhao has been called many things, but “compliant” may be the least flattering. Regulators in New York, Hong Kong, and Japan are all looking into the exchange’s operations, and the founder has been accused of not meeting the requirements necessary to operate as a fully licensed exchange in Japan.

Amid growing concerns over Binance’s global regulation, CEO and founder Changpeng Zhao stressed that the exchange is willing to work with regulators.

In an open letter published on Tuesday, Zhao noted that the cryptocurrency industry has seen significant development in the past four years since Binance’s launch, while there is still a lot of regulatory uncertainty surrounding cryptocurrencies.

In response to growing regulatory attention, the CEO shared Binance’s key principles, including a willingness to work with financial authorities to make a positive difference.

Zhao said the cryptocurrency industry still lacks a clear regulatory framework in several countries, noting that more regulation is actually a positive sign that the industry is maturing. The executive said that clear regulation provides a framework for the adoption of cryptocurrencies as more people feel safe to participate in cryptocurrencies, adding:

Compliance is the way to go, especially in new sectors like cryptocurrencies. There is still a lot of uncertainty in the sector. We also recognize that growth comes with greater complexity and responsibility.

Zhao reiterated Binance’s commitment to working with regulators and the company’s approach to dealing with the growing popularity of its platform, including actively hiring staff and creating additional systems and processes to protect its users.

The CEO noted that since 2020, Binance has expanded its international compliance team and advisory board by 500%, including appointments to key global regulators such as the Financial Action Task Force on Money Laundering. Zhao noted that Binance actively implements anti-money laundering policies on its platform and partners with cryptocurrency analytics firm CipherTrace to provide additional protection.

We learn and improve every day, Zhao wrote, emphasizing Binance’s ultimate goal of increasing freedom and inclusion for a better human society. We firmly believe that our sector benefits society by creating inclusive financial opportunities, the CEO concluded. Zhao said the company welcomed more constructive leadership to better develop the stock market.

Related: Binance disappointed by unilateral action by Barclays to block customer payments

The news comes at a time when Binance is under intense scrutiny from regulators around the world, including authorities in the UK, Japan, Canada, the US, Thailand and the Cayman Islands. Growing concerns over Binance’s regulatory status have already led to a number of consequences for users, including the imminent suspension of bank transfers to the platform and the cessation of payments on Binance by banks such as Barclays.

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