In an interview with the Wall Street Journal, Binance’s chief strategy officer (CSO), Patrick Hillmann stated that there were “gaps” in regulatory compliance during the first few years of its 2017 launch.
Hillmann revealed Binance made mistakes in the implementation of security measures such as the Know-Your-Customer protocol and Anti-Money Laundering rules to combat money laundering.
Binance admits that there are gaps in regulatory compliance
CSO also revealed that the security lapses were corrected by Binance as it improved its workforce and security protocols. This was two years after Binance established the company. The company is currently pursuing global expansion.
Hillmann attributed the failures to a lackluster staffing. The exchange’s small team was focused on expansion, compliance, cybersecurity and expansion at that time.
It’s a huge burden. He said that there were gaps in our compliance system during the first two years.
Binance’s executive noted that although the initial staff shortage was not severe, the company has increased its compliance team to close the loophole.
Hillmann stated that the firm has increased its headcount by more than 750 employees in the past two years. Hillmann stated. Binance Noah Perlman (formerly chief operating officer of Gemini), was also hired as a chief compliance officer.
Binance talks with U.S. regulators
Hillmann revealed that Binance is currently in discussions with United States watchdogs to reach a settlement in order to end existing regulatory investigations into the country’s business operations.
Over the past few years, the U.S. Department of Justice and the Internal Revenue Service (IRS), Securities and Exchange Commissions (SEC) and the Commodities Futures Trading Commissions (CFTC), have been closely monitoring Binance’s financial reserves and business structure.
Financial watchdogs, especially the CFTC, started. investigating Binance will meet in March 2021 to find out if the company has violated U.S. law by offering its products or services to citizens of the country without authorization.
The commodities regulator opened a second probe into the company later that year over allegations of insider trading. This was triggered by an independent investigation by the DOJ and the IRS.
Hillmann: The Authorities are Very Collaborative
Hillmann stated that Binance would not disclose its discussions with the RegulatorsHowever, the exchange could be subject to a penalty or even a higher amount for remediation.
“We don’t know.” It is up to regulators to decide. It is greatly in the users’ interest. He said, “We just want it to be over.”
Further, the CSO stated that the company is “highly optimistic and feeling really good about the direction of those discussions,” adding that authorities are “very cooperative.”