Crypto News – Binance Compliance Officer Requests Support Amid $4.3 Billion Fine and CZ’s Detention
Crypto News- Binance, the world’s largest cryptocurrency exchange, is urging the regulatory community for support after its founder, Changpeng Zhao (CZ), was jailed and the company agreed to pay $4.3 billion in penalties. This was the key message delivered by Noah Perlman, Binance’s Chief Compliance Officer, during a podcast with Ari Redbord from TRM Labs on Wednesday.
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Perlman
Addressing Past Issues
Perlman acknowledged the company’s past troubles, including the Nigerian detention of Binance executive Tigran Gambaryan and their ongoing cooperation with law enforcement authorities. “We’ve had issues. We’ve resolved those issues,” Perlman remarked. “We’ve turned the page.”
Leadership Changes and Legal Challenges
Following CZ’s resignation in November, Binance CEO Richard Teng took over, facing significant challenges. Zhao pleaded guilty to violating US banking laws and was sentenced to four months in prison in April. US federal agencies criticized Binance for its disregard of anti-money laundering (AML) and know-your-customer (KYC) rules, depicting the company as operating without proper regulation.
As part of its settlement, Binance agreed to embed two independent monitors within the company to oversee and reform its AML and KYC practices.
Reinforcing Compliance
When Perlman joined Binance in January 2023, he was already aware of the federal grand jury investigation into the company’s lax AML practices. “It wasn’t a surprise to me that we were, as a company, facing those issues,” Perlman noted.
Perlman, a Columbia University-trained lawyer, brought extensive experience in financial crimes and compliance from his previous roles at Morgan Stanley and Gemini. He was part of a team of compliance veterans recruited to help steer Binance through its legal woes.
Nigerian Controversy
Tigran Gambaryan, another key compliance figure at Binance, faced serious challenges in Nigeria. He was detained on charges of money laundering and tax evasion shortly after being dispatched to address allegations of the exchange facilitating illicit transactions and manipulation of the naira.
Gambaryan, who denied the charges, is currently awaiting trial while suffering from health issues, including malaria and pneumonia. Perlman described the situation as “Kafkaesque,” expressing deep frustration over the detention.
Contributions to Law Enforcement
Despite these challenges, Perlman highlighted Binance’s active role in aiding law enforcement, including counterterrorism efforts and preventing kidnappings. He referenced a notable case involving the arrest of an alleged ISIS recruiter in Istanbul in June 2023, showcasing Binance’s contribution to global security.
“We’re super proud of our work on a counterterrorism case that led to arrests across the world,” Perlman shared, underlining the positive impact of Binance’s compliance efforts.
As Binance navigates through these turbulent times, Perlman’s message is clear: the exchange is committed to compliance and seeks the support of the regulatory community to continue its operations and contributions to global financial security.
FAQ
What happened to Binance’s founder, Changpeng Zhao (CZ)?
Changpeng Zhao, the founder of Binance, pleaded guilty to violating US banking laws and was sentenced to four months in prison. This was part of a broader legal settlement in which Binance agreed to pay $4.3 billion in penalties.
Why did Binance have to pay $4.3 billion in penalties?
Binance was fined $4.3 billion by US federal agencies due to its failure to comply with anti-money laundering (AML) and know-your-customer (KYC) regulations. The settlement aims to ensure Binance adopts stricter compliance measures moving forward.
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