Binance, the world's largest cryptocurrency exchange, announced on its website that U.S. government agencies have commended the enhancements made to its compliance program over recent years. The company has implemented measures to safeguard its users, including compliance audits, adherence to anti-money laundering (AML) standards, wallet segregation, and the introduction of a pioneering proof of reserves (PoR).
According to Binance's post, in the lead-up to its settlement with the U.S. government in November, the company underwent scrutiny by multiple government bodies. The investigation uncovered both past issues and improvements made by Binance to rectify those problems. Several government agencies lauded these advancements in Binance’s compliance program. The U.S. Financial Crimes Enforcement Network (FinCEN) consent order stated that 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 consent order also noted that "Binance’s current compliance program would not permit users identified as associated with terrorist financing to remain on the platform or remove funds."
In a post dated January 23rd, Binance highlighted its efforts towards developing a "comprehensive, industry-leading compliance program." This includes AML standards such as an analytics tool capable of detecting suspicious activity on its platform. In one instance, this AML tool led to the apprehension of members of FANCYCAT, "a prolific cybercriminal ring responsible for over $500M worth of damages."
CoinMarketCap reported that Changpeng Zhao (CZ), Binance’s former CEO, spearheaded an industry-wide initiative for exchanges to publish proof of reserves (PoR) as evidence against holding fractional reserves. CZ said in a November 2022 post following the collapse and bankruptcy of crypto exchange FTX: "All crypto exchanges should do merkle-tree proof-of-reserves. Banks run on fractional reserves. Crypto exchanges should not." CoinMarketCap said that after Binance "set the movement into motion on November 10, 2022, many of the most popular cryptocurrency exchanges have pledged to prove their solvency by adhering to the new Proof of Reserves standard."
According to CoinMarketCap, Binance was established in 2017. As of August 2022, it had a daily trading volume of approximately $76B, making it the world's largest crypto exchange. Binance lists over 350 tokens and provides users with the ability to buy, sell, and store digital assets.