Under fire in many countries, Binance says it's ramping up compliance team (2024)

Changpeng Zhao, founder and chief executive of the world’s largest cryptocurrency exchange Binance, has a message for regulators. Amid intense scrutiny in Europe and the US, the Candian-born CEO wrote in a blog post that the company is ramping up its compliance team and partnerships, and localising operations to adhere to local regulations.

India’s largest crypto exchange WazirX, which was acquired by Binance in 2019, is under investigation by the Enforcement Directorate (ED). During the agency’s probe into alleged money-laundering by operators of illegal, Chinese-owned betting apps, it found that Chinese nationals had converted Indian rupee deposits into cryptocurrencies and transferred them to Binance wallets. Binance is registered in the Cayman Islands.

During an interview with ET last week Nischal Shetty, founder and CEO of WazirX, said that Binance and WazirX were "different brands”, and claimed that the scrutiny on Binance doesn’t affect WazirX.

In late June, Binance was barred from conducting “regulated activities” in the UK by the country’s financial regulator. Around the same time, Japan’s financial markets regulator, issued a warning against Binance, saying the cryptocurrency exchange continues to offer services in the country without authorisation.

Germany's watchdog said in April that Binance risked being fined for offering tokens connected to stocks. In May, Bloomberg reported the exchange was under investigation by the US Justice Department and Internal Revenue Service.

“Given the recent hyper-focus on regulation when it comes to Binance, I would like to take this opportunity to share our historical background and principles, clarify our stance and commitment, and outline our approach and plans for regulations and the sustainable development of the crypto industry going forward,” he wrote in the blog post.

In his blog post, Zhao said growing adoption of crypto has sparked “a lot more attention and debates on how the crypto industry should move forward… The industry still has a lot of uncertainty. We also recognise that with the growth comes more complexity and more responsibility.”

The founder of the four-year-old exchange said it is hiring more people and putting in place more systems and processes to strengthen its compliance with laws in different countries.

This includes doubling its international compliance team by the end of the year by adding high-profile individuals and advisors. Zhao said the exchange will continue to strengthen its anti-money laundering controls and partnerships as well.

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