Major Crypto Exchanges binance Will likely pay monetary penalty to settle current investigations by We Authority, Wall Street Journal informed ofQuoting the firm’s chief strategy officer.
According to Patrick Hillman, the company has been working on plugging compliance gaps and mistakes made throughout its existence – but it is likely that it will still be asked to pay fines by regulators.
This could be the exchange’s way of fending off regulatory and law-enforcement scrutiny of its business.
Hillman was quoted by the WSJ as saying,
Binance is “working with regulators to figure out what remedies we need to do right now to make amends for this.” […] The result would be “potential fines, could be higher. … We just don’t know. That’s for the regulators to decide.”
The chief strategy officer of the firm argued that these aforementioned gaps were caused by the rapid growth of Binance, especially since the business was started by software engineers, who were not knowledgeable about the rules and regulations that deal with bribery, corruption, money laundering. addressed the risk. economic sanctions.
Per The company’s initially small staff was stretched thin as the exchange worked on international expansion, compliance and cyber security, Bloomberg cites Hillman.
“It’s a tremendous burden. […] As a result, there were some loopholes in our compliance system in the first two years.”
He claimed that the gap has since been closed.
How much they would have to pay, or when for that matter, Hillman couldn’t say. However, according to the WSJ, he added that,
Binance is “highly confident and feeling really good about those discussions”. [with the US authorities] are going […] This will be a great moment for our company as it allows us to put this behind us.”
However, the regulatory landscape in the US is unclear, thus making it quite difficult for crypto businesses to maneuver. Hillman said it was a “very confusing time” for Binance to understand how the country’s regulators want to oversee this specific market.
US officials are stepping up
Hillman is quoted as saying that the recent steps taken by the US authorities “will have a really deep and long-lasting chilling effect” in the country.
Just this month, among many other related events, the Blockchain Infrastructure Platform paxos declare SEC had a plan to take enforcement action against it upon issue Binance USD (BUSD)When New York State Department of Financial Services (DFS) ordered Paxos to stop minting BUSD.
it was then exposure He circleUS-based payments company that issues usd coin (usdc) The stablecoin, had alerted the New York watchdog that it found some discrepancies in blockchain data that suggested Binance did not store enough crypto in reserve to support the number of tokens issued.
Also in the form of informed ofover $400 million reportedly flowed binance.us California based account Silvergate Bank To merit peak, a trading firm linked to Binance CEO Changpeng Zhao (CZ) in the first three months of 2021. A Binance.US spokesperson claimed that Merit Peak was “neither trading nor providing any kind of services on the Binance.US platform.” Specifically, the SEC launched an investigation into the relationship between Binance.US and trading firms in February 2022 Sigma Chain AG and Merit Peak.
Earlier this year, US officials Sent The subpoenas to US hedge funds and market-making firms dealing with Binance earlier this year are asking for records of their communications with the exchange.
Meanwhile, major crypto exchanges Kraken Agreed to pay US$30 million in fines Securities and Exchange Commission ,seconds) a few days ago to reach a settlement and end the civil investigation over his investment program, without admitting or denying wrongdoing.
After Kraken reached a settlement with the SEC and decided to stop offering staking services or programs to customers in the US, coinbase CEO Brian Armstrong Said that the crypto-staking services of his exchange were not securities, adding that he was prepared to defend it in court.
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