Largest crypto platform compliance costs top $200M

investmentnews.com:

Binance Holdings Ltd. is hiring 1,000 people this year with many earmarked for compliance roles as the crypto exchange’s annual spending to meet regulatory requirements, including US oversight under a plea deal, tops $200 million.

Chief Executive Officer Richard Teng, who is visiting the US to talk to monitors and officials, outlined the employment goals for the world’s largest crypto trading platform in an interview with Bloomberg News in New York on Wednesday.

“I’ve been a regulator all my life,” Teng said. “Government agencies are important.” He declined to say whether he has met with the Securities and Exchange Commission during his trip. The SEC is suing Binance and wasn’t part of the US settlement.

That plea deal with the Justice Department and other US agencies included a $4.3 billion penalty for failures that let criminals and terror groups use the exchange. The firm faces years of compliance monitoring by the DOJ and the US Treasury’s Financial Crimes Enforcement Network.

Binance plans to have a 700-strong compliance workforce by the end of 2024, up from about 500 currently, said 55-year-old Teng. His career includes stints as a senior regulator at the Monetary Authority of Singapore as well as at the city-state’s SGX stock exchange. He was also chief executive officer of the regulator at Abu Dhabi’s international financial center.

Teng said Binance fields a growing number of requests from law-enforcement agencies worldwide, numbering 63,000 so far this year, up from 58,000 in 2023. 

Spending on compliance has climbed from $158 million two years ago and is set to increase further, he said. The monitors appointed by the US agencies, Forensic Risk Alliance and Sullivan & Cromwell, have already begun work. 

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