Today, we are pleased to announce that we have reached a resolution with the U.S. Department of Justice, the Commodity Futures Trading Commission, the Office of Foreign Assets Control, and the Financial Crimes Enforcement Network regarding their investigations into Binance’s past registration, compliance, and sanctions issues. This resolution acknowledges our company’s criminal liability for past compliance violations and opens a new chapter for our company that is both challenging, but also one of learning and growth. With our commitment to compliance and enhanced governance measures, we can begin to articulate and share our vision for the future of Binance and the crypto industry. We are confident that Binance will be even stronger in the future with a solid foundation.
While Binance is not perfect, we have been committed to protecting our users since the beginning and have made great efforts in investment security and compliance. However, when Binance started operations, we did not have adequate compliance management tools to match our rapidly growing business, and these omissions should have been. As Binance grew rapidly around the world, the industry was still in a new and evolving stage, and regulation was still in its early stages, and Binance made mistakes along the way. Today, we take responsibility for these past actions.
Over the past two years, we have worked hard to restructure our organization and personnel structure and upgrade our business systems. We have introduced new leadership with extensive compliance experience and deep compliance backgrounds, including from top traditional financial institutions and industry-leading companies, as well as law enforcement agencies. It is through this process that Binance has gradually become a stronger, safer, and even more reliable platform.
Equally important, we have never wavered in our core values of maintaining user safety and security. We take our responsibilities as a custodian very seriously and always ensure that we maintain a 1:1 storage guarantee for user assets, which means that users can withdraw all their assets from the platform at any time. It is worth noting that in the above solution, the US regulator:
Binance was not accused of misappropriating any user funds.
Nor did it accuse Binance of any market manipulation.
Our global leadership team is ready for the long-term development of Binance. The platform business will always focus on protecting users and building a platform that can develop in the long term, so that it can serve more users in the next five, fifty years or even longer. Mr. Changpeng Zhao, the former CEO of Binance, is still our major shareholder and will provide consultation on past related matters in the development of the platform business.
To continue serving our users for fifty years or more, we understand the current challenges of cryptocurrencies and are continually working to develop industry-leading standards to address them, including in the areas of compliance, security, cooperation with law enforcement, and user transparency.
Binance is stronger today than ever before, as we continue to promote cooperation with global regulators and accumulate valuable experience in serving cryptocurrency users. We recognize that only by maintaining transparency and compliance can we rebuild industry confidence in turbulent market conditions. Learning from our own history, we are proud to say that Binance is one of the companies in the industry that invests the most in compliance, security, and transparency.
Leadership Changes
Richard Teng, former head of global regional markets at Binance, will take over from CZ as CEO, effective immediately. Richard is a veteran leader with over three decades of financial services and regulatory experience, and he will lead Binance into its next phase of development. Prior to joining Binance, Richard served as CEO of the Financial Services Regulator at Abu Dhabi Global Market, Chief Regulatory Officer at Singapore Exchange, and Director of Corporate Finance at the Monetary Authority of Singapore.
Compliance and Security
Binance has been working hard to restructure its organization and personnel, upgrade its systems, and set new industry compliance standards. For example, we have enhanced our internal anti-money laundering ("AML") detection and analysis capabilities. Binance's AML compliance policy is now an industry standard and is still being improved across the board. At the same time, Binance has also played an important role in assisting law enforcement agencies in combating cyber and financial crimes and the financing of terrorism.
Binance was one of the first major exchanges in the world to impose a mandatory KYC (Know Your Customer) procedure on all users outside the United States. Today, potential users (who cannot be U.S. persons) must provide valid identification and submit a “selfie” photo, while Binance uses the support of world-class vendors to verify their identity. Binance also searches through the World-Check feature to identify, for example, criminal history, links to terrorism, presence on the Politically Exposed Person (“PEP”) list, and presence on sanctions watch lists. In addition, Binance uses real-time and post-trade monitoring tools to detect and block suspicious transactions. In recent years, Binance has invested significant resources to enhance its compliance systems. Today, Binance’s new leadership, with strong compliance backgrounds, oversees a compliance team of hundreds of people, including more than 60 people who have worked in law enforcement or regulatory agencies, and more than 200 people who have obtained compliance professional certifications, including AML Specialist certification. In addition to the core compliance team, Binance employs hundreds of operations, product, and technical personnel who support the development and execution of the company’s compliance program.
Binance takes sanctions compliance seriously and has invested a lot of resources and energy. The platform has a dedicated independent sanctions team to ensure that organizations strictly comply with the provisions of global sanctions policies. Today, in addition to KYC and IP blocking, Binance voluntarily complies with the sanctions laws of relevant countries, including the United States, through the use of advanced third-party tools, and implements relevant control and restriction measures, including real-time on-chain sanctions transaction monitoring and screening.
Law enforcement cooperation
Binance employs a law enforcement team of approximately 70 people who regularly engage and communicate with law enforcement agencies and relevant public officials. Binance has also discovered and proactively assisted law enforcement agencies in dealing with national security-related issues in many countries around the world, including the United States. In addition, from January 1 to November 13, 2023, Binance processed more than 52,700 law enforcement requests through its government law enforcement request system, providing services to 12,699 registered law enforcement officials around the world. In 2022, the number of law enforcement requests handled by the Binance team also exceeded 50,000.
Binance actively shares industry knowledge with law enforcement agencies. In 2022, Binance participated in and conducted more than 70 workshops around the world to train law enforcement officers to combat cyber and financial crimes around the world. Building on these efforts, Binance announced a formal global law enforcement training program in September 2022 to help law enforcement officers detect and combat financial and cyber crimes.
In 2023, with the support of our dedicated law enforcement training team and investigation team, 120 online and offline trainings and workshops were conducted, and these efforts were highly positively evaluated by the law enforcement community.
Binance is honored to be one of the world’s most important law enforcement partners in combating illicit financial activity around the world.
Our commitment to transparency
Binance carefully protects the assets of all users, and users can withdraw 100% of their assets on Binance at any time. In order to make the platform's capital reserves more transparent, Binance has published the addresses of cold and hot wallets, and released the Merkle tree's reserve proof and B-Token's collateral proof.
Binance has also established a series of security measures to protect users, including the establishment of a margin insurance fund to protect users from losses when their interactive/isolated margin equity is less than zero or when users are unable to repay their debts. Binance is one of the first cryptocurrency exchanges to establish a security fund, also known as the "Investor Protection Fund" (SAFU), to protect users in extreme cases. In addition, Binance has also made public the wallet address of the SAFU fund.
Binance combines security measures with educational initiatives, allowing users to better understand the cryptocurrency ecosystem while protecting themselves. To further promote cryptocurrency education for users, Binance Academy has published more than 430 cryptocurrency-related articles, as well as cryptocurrency vocabulary entries and in-depth courses in 30 languages; cooperated with more than 70 universities in 25 countries to impart cryptocurrency and Web3 knowledge; and launched anti-fraud activities with partners in many places around the world to enable users to have the ability to identify and avoid scams.
The Future of Cryptocurrency
We firmly believe that the crypto industry and Binance have a bright future.
We have built a crypto ecosystem and community where everyone can use blockchain technology to find new opportunities for their families, communities, and economies around the world. Binance will continue to work to enable more people around the world to experience the transformative power of these technologies.
*Note: Although token assets held in Binance Savings accounts may sometimes be collateralized by different tokens, this does not affect Binance’s ability to redeem them 1:1.
