Today we are pleased to announce that we have reached an agreement with the US Department of Justice, the Commodity Futures Trading Commission, the Office of Foreign Assets Control and the Financial Crimes Enforcement Network in connection with their investigations into historical record, compliance and sanctions. These resolutions recognize our company's responsibility for historic criminal violations and allow our company to turn the page on a difficult but transformative chapter of learning and growth. With compliance and governance improvements reflected in our commitments, we can share our vision for the promising future of Binance and the future of the cryptocurrency industry. We are confident that Binance will emerge as a stronger company as we lay the foundation for the next 50 years.
Although Binance is not perfect, it has strived to protect users since its beginnings as a small startup and has made enormous efforts to invest in security and compliance. However, when Binance first launched, it didn't have adequate compliance controls for the company it was quickly becoming, and it should have. Binance grew at an extremely rapid pace globally, in a new and evolving industry that was in the early stages of regulation, and Binance made poor decisions along the way. Today, he assumes responsibility for this past chapter.
Over the past two years, we have worked hard to restructure our organization and our team and improve our systems as well. We have a new management team with extensive regulatory compliance experience and an impressive career path, spanning from major traditional financial institutions and leading technology companies, to law enforcement and large enterprises. Thanks to this process, we have become a more solid, safe and secure platform for our users.
Equally important is the fact that we have never wavered in upholding our core values of security and user protection. We take our responsibility as custodians very seriously and maintain a 1:1 backup for all user assets.* This means that users can withdraw 100% of their assets from the platform at any time. It should be noted that in our resolutions with the US agencies these:
They do not allege that Binance has misappropriated user funds,
nor do they allege that Binance has manipulated the market.
Our strong team of global leaders has positioned Binance for long-term growth. Our business is focused on protecting our users and building a platform for decades to come. This focus and experience provides added resilience so that we can continue to operate on behalf of our users not only for the next five years, but for the next fifty years or more. And our former CEO remains the majority shareholder of Binance and an available resource for consultation on historical areas of our business.
Positioning ourselves for the next fifty years means understanding the current challenges of cryptocurrencies and working to develop industry-leading standards to address them, including in the areas of compliance, security, cooperation with law enforcement and transparency.
As a result of these updates and working with global regulators, Binance is a much stronger company today than it was in the past. We have learned valuable lessons that are applicable to the entire industry for the benefit of cryptocurrency users. We recognize that, along with compliance, transparency is essential to rebuilding industry trust amid difficult market conditions and industry mismanagement. Learning from our own past, we are proud to lead some of the most significant investments in compliance, security and transparency of any company in our industry.
Leadership change
Effective immediately, Richard Teng, now Global Head of Regional Markets at Binance, succeeds CZ as CEO. Richard is a highly qualified leader and, with over three decades of experience in financial services and regulation, will guide the company through its next period of growth. Prior to joining Binance, Richard was CEO of the Financial Services Regulatory Authority at Abu Dhabi Global Market; Director of Regulation at the Singapore Exchange (SGX), and Director of Corporate Finance at the Monetary Authority of Singapore.
Compliance and security
Binance has been systematically working to restructure the organization and team, updating systems and setting a new compliance standard in the industry. For example, we have updated and expanded our internal anti-money laundering ("AML") detection and analysis capabilities. Binance AML compliance is now an industry standard, and Binance continues to make improvements to its comprehensive AML policies. Binance also plays an important leading role in helping law enforcement combat terrorism, cyber and financial crimes.
Binance was one of the first major exchanges outside the United States to require mandatory KYC procedures for all users. Currently, potential users (none of whom can be American) must provide a valid ID and submit a “selfie” photo, which Binance matches against their ID with the support of world-class providers. Binance also conducts searches through World-Check to identify, for example, any criminal records, connections to terrorism, inclusion on politically exposed persons ("PEP") lists and sanctions watch lists. Binance also uses real-time and post-transaction monitoring tools to detect and stop suspicious transactions. In recent years, Binance has invested enormous resources to improve its compliance program. Today, Binance has a new management team with deep compliance expertise that oversees a team of hundreds of people supporting compliance, including more than 60 people with prior experience in law enforcement or regulatory agencies and more than 200 people with professional compliance certificates, including Certified AML Specialists. In addition to the core compliance team, Binance employs hundreds of dedicated operations, product, and technology employees who support the development and execution of the company's compliance programs.
Binance takes sanctions compliance very seriously and has an independent sanctions team that ensures the organization diligently complies with global sanctions regulations. Additionally, Binance has dedicated significant resources and efforts to sanctions compliance. Today, in addition to KYC and IP blocking, Binance uses advanced third-party tools to voluntarily enforce controls and restrictions related to sanctions laws of countries, including the United States, including real-time on-chain implementation. of surveillance sanctions and detection of transactions.
Cooperation with law enforcement
Binance also has several teams that regularly collaborate with law enforcement agencies and officials, which together have more than 70 members. Binance has proactively discovered and assisted law enforcement in addressing national security issues in countries around the world, including the United States. Additionally, from January 1 to November 13, 2023, Binance processed more than 52,700 law enforcement requests, serving 12,699 registered law enforcement officers worldwide through its Law Enforcement Request System. Government Law. This is in addition to the more than 50,000 applications that the Binance team processed in 2022.
Binance proactively shares knowledge with law enforcement. In 2022, Binance conducted and participated in more than 70 training workshops on combating cyber and financial crime around the world. Building on these efforts, in September 2022, Binance announced a Global Law Enforcement Training Program designed to help law enforcement detect and combat financial and cybercrime.
In 2023, our dedicated law enforcement training team, along with the support of our investigations team, delivered 120 in-person and online courses and workshops that consistently received a very positive response from the enforcement community. of the law.
Binance is pleased to be one of the most important global partners of law enforcement in their fight to combat illicit financial activity around the world.
Commitment to transparency
Binance carefully protects its clients' assets. Users can always withdraw 100% of their assets from the platform at any time. As part of its commitment to transparency, Binance has shared the addresses of its hot and cold wallets, as well as published the Merkle Tree Reserve Proof and Collateral Proof for B-Tokens.
Binance has also established security measures for users, including the Margin Insurance Fund to protect users from losses when their crossed/isolated margin capital is less than zero or when a user is unable to pay their debts. Binance is one of the first cryptocurrency exchanges with a secure fund – known as the Safe Asset Fund for Users (“SAFU”) – to safeguard users in extreme cases. Binance has made SAFU wallet addresses public.
Binance combines its security measures with educational initiatives so that users can protect themselves and better understand the cryptocurrency ecosystem. As part of its commitment to advancing cryptocurrency education for all, Binance has made more than 430 articles, as well as glossary entries and in-depth courses related to cryptocurrencies, available to the public on Binance Academy in 30 languages; has collaborated with more than 70 universities in 25 countries to impart knowledge about cryptocurrencies and Web3; and has collaborated with local partners to launch an anti-scam campaign to train users to identify and avoid scammers.
The future of cryptocurrencies
We firmly believe that the cryptocurrency industry and Binance have a bright future.
We have built a community and ecosystem that enables people to harness the power of blockchain technology to unlock opportunities for their families, communities and economies around the world, and we are committed to ensuring that the transformative power of these technologies is experienced by more. people all over the world.
*Note: Assets held in Earn accounts are sometimes backed by collateral in a different token than the one invested in, although this should not affect Binance's ability to honor 1:1 refunds.