Feb 16, 2023
Binance to Face Fines for Regulatory Investigations
The world’s largest digital asset exchange, Binance, is currently in the process of settling regulatory and law-enforcement investigations in the United States, which may result in fines and other penalties.
Patrick Hillmann, Binance’s Chief Strategy Officer, recently revealed to the Wall Street Journal (WSJ) that the firm has been working to remedy past compliance issues. Hillmann stated that the company is “working with regulators to figure out what are the remediations we have to go through now to make amends for that.” He further added that the outcome of ongoing investigations will likely be fines but could be more, leaving the decision to the regulators.
Binance has been subject to several investigations in the U.S., including one which began in 2018 by the Department of Justice over potential violations of anti-money-laundering laws. In March 2021, the Commodity Futures Trading Commission also probed whether the company offered crypto derivatives to U.S. customers without registering with the agency. The Securities and Exchange Commission (SEC) launched a probe into Binance’s U.S. division last February regarding trading firms connected to CEO Changpeng Zhao.
Hillmann expressed confidence in the proceedings, but was unable to provide a figure for the size of the fines or a timeline for resolution with U.S. regulators. He noted that the lack of clarity for crypto in America has made it a “very confusing time for us.”
The SEC has recently stepped up its enforcement activity, which has been dubbed a “war on crypto” by industry observers. This appears to target certain staking services and stablecoins which the SEC has deemed as falling under securities laws. Hillmann commented that this “would have a really deep and long-lasting chilling effect in the United States.”
This week, New York regulators cracked down on Paxos, preventing it from issuing more of the Binance-branded stablecoin BUSD. Last week, U.S. crypto exchange Kraken was hit with a $30 million fine and ordered to halt its staking services following SEC enforcement action.
Hillmann concluded that resolving issues with U.S. regulators would be good for the firm and its future. He said that it “will be a good moment for our company because it allows us to put it behind us.”
Though Binance declined to offer any additional comments on the matter, the company is looking to the future with optimism. Binance is a leader in the web3 space, and is actively engaged in the promotion and marketing of NFTs, crypto, and other web3 assets. The company is also a major player in the NFT marketing space, offering a wide range of services through its NFT marketing agency, including Twitter NFT marketing and web3 agency services. Binance is also selling NFTs, giving users the ability to purchase NFTs from a variety of sources. With the resolution of its outstanding issues in the United States, Binance is poised to become an even bigger player in the web3 space.
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