Binance, the world's leading cryptocurrency exchange, has announced that U.S. regulatory agencies have not only confirmed the company's historical compliance issues but also acknowledged the efforts it has made to rectify them. This announcement comes after Binance reached a resolution with the U.S. government in November.
In a post on its website, Binance admitted to initial shortcomings in its compliance controls. "As has been widely reported, when Binance first launched, it did not have compliance controls adequate for the company that it was quickly becoming, and it should have," stated the company. "Acknowledging this, we have taken full responsibility for our past actions." As part of its corrective measures, Binance agreed to accept a monitorship for its compliance and sanctions control programs.
The post further detailed that during the two years leading up to the resolution with U.S. government agencies, Binance underwent "unprecedented scrutiny". This process revealed how Binance had improved the safety and security of its platform. The company noted that these improvements were highlighted by three U.S. agencies: The Financial Crimes Enforcement Network (FinCEN), the Department of Justice (DOJ), and the Office of Foreign Assets Control (OFAC).
According to FinCEN’s consent order, Binance "remodeled its compliance program governance and organization structure, including by hiring new compliance leadership with professional compliance experience in the financial sector and law enforcement." The agency also pointed out that Binance cooperates with law enforcement agencies worldwide to tackle illegal activity. "Binance works closely with law enforcement agencies worldwide related to this type of illicit activity, including Hydra, darknet markets, and hacks," stated FinCEN's consent order. It further added that Binance has "proactively cooperated with global law enforcement and blockchain vendors to combat terrorism financing."
OFAC commended Binance for exhibiting "substantial cooperation" throughout their investigation. According to OFAC's statement, this cooperation included "conducting an extensive, independent, internal investigation, responding promptly to OFAC’s requests for information, providing large volumes of data regarding the Apparent Violations, making multiple presentations to OFAC, submitting inculpatory internal communications, and executing a statute of limitations tolling agreement." Furthermore, OFAC noted that Binance had established "two teams dedicated to cooperation with law enforcement, including by proactively sharing intelligence and responding to time-sensitive requests."
The DOJ's plea deal agreement highlighted Binance's improvements in its anti-money laundering (AML) and countering the financing of terrorism (CFT) programs. The agreement stated that Binance has invested resources into improving these programs "including by replacing ineffective compliance staff with experienced employees and significantly increasing compliance headcount."