Binance’s explosive growth led to compliance failures.

“As part of the agreement, CZ is prohibited from participating in the day-to-day running of the company’s operations,” explains Richard Teng.

Nonetheless, the current Binance CEO appears to be someone who enjoys the challenges ahead. In an interview with Cointelegraph, just two weeks after taking over from outgoing CEO Changpeng ‘CZ’ Zhao, Teng seems to be enjoying being at the helm of the world’s largest cryptocurrency exchange.

“I am taking the lead and driving our growth agenda, working very closely with regulators around the world.”

Teng believes that the “cloudy” situation that has clouded Binance in recent months is easing with the whopping $4.3 billion settlement with the U.S. Department of Justice related to numerous violations of U.S. regulations and sanctions programs.

$4.3 billion settlement due to initial gaps in compliance

The exchange has paid a heavy price for mistakes made during its remarkable growth since 2017. Teng recalls how Zhao built Binance from a team of six people into a global operation with thousands of employees serving a user base of more than 166 million people.

“When we first founded the company, there was a gap in terms of compliance. This has led to all these violations and mistakes, but these are historical problems,” Teng says.

Shortcomings in the initial compliance regime led to the largest cryptocurrency-related settlement in U.S. history. But Teng insists the company has always kept user funds, security and safety “sacred.”

“The U.S. agency examined our operations in great detail to reach an agreement and there are no allegations that user funds were misused,” he added.

Binance’s Obligations to U.S. Authorities

Binance now assumes the ongoing costs and investigations that come with a settlement with U.S. authorities. This includes five years of monitoring and significant compliance efforts to ensure “Binance’s complete withdrawal from the United States.”

Teng would not get involved in the details of Binance.US’ ongoing legal battle with the U.S. Securities and Exchange Commission (SEC) over alleged securities violations. Nonetheless, he argued, the company took into account the costs of meeting the demands set forth in the settlement and its lawsuit with the SEC.

The Binance CEO is also under a non-disclosure agreement related to the $4.3 billion settlement and will not comment on how the fine will be paid. Cointelegraph understands that Binance is in the process of paying the valuation and that a separate lawsuit filed against CZ will be paid personally by the former CEO.

The company also confirmed that the movement of approximately $3.9 billion worth of USDT tokens reported on November 21 was “unrelated to the resolution matter” by the U.S. Department of Justice.

Has Binance been treated unfairly?

Prominent figures in the cryptocurrency space, including former BitMEX CEO Arthur Hayes and Galaxy Digital’s Mike Novogratz, have commented on the differences in treatment between Binance and mainstream financial firms in recent years.

Teng weighed in on the perception that “Wall Street banks” had not been treated the same despite their bigger failures.

“It is not uncommon for fines to be issued in the financial sector. If you Google the list of fines paid by financial institutions, there are nearly $90 billion in fines on that list,” Teng says.

Whether Binance is an example or not is not a consideration. Nonetheless, considering that Binance operates in 18 jurisdictions, the exchange may be “the most highly regulated exchange globally.”

Binance is focusing on regulatory compliance from now on. The company has made headlines for headhunting strategic individuals to navigate regulatory requirements in various jurisdictions.

Teng said the company has invested “a lot” in this regard, pointing to key talent on its compliance team with backgrounds in regulators such as the SEC and traditional financial institutions such as Morgan Stanley and Barclays.

Buildings in UAE, France

Although Binance still has global operations, the company has established two regional headquarters. The United Arab Emirates (UAE) serves as the headquarters for operations in the MENA region, while France is the European base.

The relocation area is familiar to Teng, who previously lived in the UAE for nine years and served as CEO of local regulator Abu Dhabi Global Markets. His role was to build a cryptocurrency framework for the local ecosystem.

“When I first heard about cryptocurrency, I thought it was the future of finance. But for this to really gain traction and mass adoption, two factors are needed,” explains Teng.

Clarity of rules and regulations was the first consideration, and the second was promoting institutional adoption. The latter point remains important to Teng as it brings liquidity with investors and drives research.

As a result, the UAE has emerged as a proverbial oasis for cryptocurrency and blockchain. As our base of operations in the MENA region, we continue to attract global players.

The implementation of European market regulations for cryptocurrency assets also bodes well for Binance’s prospects in the region.

“The rules are clear to operate in 27 different jurisdictions,” Teng said, providing comprehensive requirements for an industry that has so far struggled with “differences in terms of the rules.”

Binance was forced to shut down its services in the Netherlands in June 2023 after failing to meet registration requirements to obtain a local virtual asset service provider (VASP) license. MiCA could be a means of expanding into new markets beyond 2024.

Wear CZ shoes

Without a doubt, being in CZ’s position is an unenviable task. Teng describes Binance’s founder as an inspirational leader and great mentor with a focus on execution.

While we honestly understand that no incumbent can replace CZ’s role as founder and CEO, the current environment also offers the benefit of new faces and new approaches.

“What I can do is bring my own value and expertise to a mature company. Binance is completely different now compared to six years ago,” explains Teng. The new CEO will report to the board of directors, which will exercise management authority over the company.

When she has time to unwind, Teng hopes to maintain a routine in her private life. The CEO enjoys working out with a mix of “weights, cardio and core.” He is also a bookworm, citing the biography of Elon Musk by Walter Isaacson as the most recently read book.

Magazine: Slumdog Billionaire: The surprising riches story of Polygon’s Sandeep Nailwal