Binance to Hire 1000 New Employees as Compliance Costs Reach $200 Million

Highlights:

• Binance plans to hire 1000 employees by the end of this year, with 20% in compliance roles.
• The company’s annual compliance spending has risen to over $200 million.
• CEO Richard Teng, with a strong compliance background, is leading regulatory efforts.

Speaking to Bloomberg on Aug. 21, Richard Teng, chief executive of the largest crypto exchange Binance, said the company intends to expand its workforce by 1,000 employees by the end of 2024, with at least 20% of the new staff focused on compliance. This move is part of Binance’s strategy to tackle regulatory challenges, particularly in the US. 

Teng stated that the firm plans to expand its compliance workforce to 700 by the end of 2024, up from the current 500. According to the company website, Binance employs over 5,000 people across over a hundred locations. Teng mentioned that the hiring spree will also encompass customer service roles.

Binance is hiring 1,000 people this year with many earmarked for compliance roles as the crypto exchange’s annual spending to meet regulatory requirements tops $200 million https://t.co/HIW11OWclK

— Bloomberg Crypto (@crypto) August 22, 2024

The Binance CEO has a strong background in regulatory compliance, having served as a senior regulator at the Monetary Authority of Singapore and as CEO of the Financial Services Regulatory Authority at Abu Dhabi Global Market.

Binance to Spend Over $200 Million on Regulatory Compliance Amid Legal Challenges

According to the report, the exchange is projected to spend over $200 million this year on regulatory compliance, including US efforts following the plea deal with the Justice Department and other agencies. Teng said the exchange’s compliance expenditure has grown from $158 million two years ago and is anticipated to continue rising.

In 2023, Binance reached a plea deal with the DOJ. The exchange and former CEO Zhao agreed to settle criminal charges for failing to prevent illicit activities on the platform, among other violations. In February of this year, a US judge approved the plea agreement, mandating that Binance pay $4.3 billion in penalties. 

The exchange also faces a separate lawsuit from the Securities and Exchange Commission (SEC), which claims that Binance offered financial securities without proper registration. According to Teng, the two monitors appointed by US agencies, Forensic Risk Alliance and Sullivan & Cromwell, have already started assessing the exchange’s financial statements and transaction tracking.

Binance CEO Highlights Compliance Efforts

Teng, who replaced co-founder Changpeng Zhao as CEO last year, is meeting with officials in the United States following a plea deal with the Justice Department. In a post on X on August 21, he wrote, “The amount of resources, talent, and effort that Binance invests in proactively creating a more secure ecosystem is unparalleled.” He noted that Binance has received an increasing number of requests from law enforcement agencies globally, totaling 63,000 so far this year, compared to 58,000 in 2023.

The amount of resources, talent, and effort that #Binance invests in proactively creating a more secure ecosystem is unparalleled. 💪

If you ask me, "Why Binance?" This is definitely one of the reasons. We always put the well-being of users and the industry first.

— Richard Teng (@_RichardTeng) August 21, 2024

Earlier this month, Binance became fully operational in India after settling a $2.25 million penalty with the country’s Financial Intelligence Unit. The exchange also agreed to pay $1.75 million in a settlement with Brazil’s SEC, which had banned Binance from offering derivatives products in the country in 2020.

Alongside hiring 1000 new employees at Binance, CEO Teng has implemented several changes to the platform. These include updating dealings with prime brokers, tightening token listing requirements, and spinning off the venture arm. However, the company has not yet designated a global headquarters or released fully audited financial statements.