"Under the agreement, CZ cannot participate in the daily operation of the company," explains Richard Teng.
Despite that, the current CEO of Binance has the figure of a man who delights in the challenges that lie ahead. Speaking to Cointelegraph just two weeks after taking over from outgoing CEO Changpeng 'CZ' Zhao, Teng appears to be enjoying being at the helm of the world's largest cryptocurrency exchange:
"I am taking over and driving our growth agenda while working closely with global regulators."
Teng believes the "cloudy" conditions that clouded Binance in recent months are dissipating following its staggering $4.3 billion deal with the United States Department of Justice regarding a series of violations of US regulations and sanctions programs.
$4.3 billion settlement as a result of early compliance gaps
The exchange has paid a heavy price for the mistakes made during its meteoric growth from 2017 onwards. Teng remembers how Zhao built Binance from a team of six to a global operation comprised of thousands of employees serving a user base estimated at over 166 million.
“In those early days, as we were building the company, there were gaps in terms of compliance. That led to all these violations and errors, but these are historical issues,” says Teng.
The shortcomings of its early compliance regime have led to the the largest cryptocurrency-related deal in American history. However, Teng maintains that the company has always ensured that its users' funds and security remain "sacrosanct."
"US agencies have examined our operations in great detail so that we could reach this agreement, and there are no accusations of misappropriation of user funds," he adds.
Binance's obligations to US authorities
Now Binance must bear the cost and ongoing scrutiny of its agreement with US authorities. This includes a five-year follow-up and significant compliance commitments to ensure "Binance's complete exit from the United States."
Teng wouldn't get carried away with Binance.US details ongoing legal battle with the US Securities and Exchange Commission (SEC) for alleged securities violations. Still, he maintains that the company has taken into account the costs of complying with the requirements set out in its agreement and its case before the SEC.
Binance's CEO is also required to sign confidentiality agreements related to its $4.3 billion deal and declined to comment on the means of paying the fine. Cointelegraph understands that Binance is in the process of paying for the evaluation of it, while a separate case brought against CZ will be paid personally by the former CEO.
The company also confirmed that the movement of about $3.9 billion in USDT tokens reported on Nov. 21 “was not related to resolution matters” with the U.S. Department of Justice.
Was Binance treated unfairly?
Prominent figures in the cryptocurrency space, including former Arthur Hayes, CEO of BitMEX and Mike Novogratz of Galaxy Digitalhave commented on the disparity between the treatment of Binance and major financial companies in recent years.
Teng weighed in on the perception that “Wall Street banks” have not been subjected to the same treatment despite arguably even greater failings.
“Fines in the financial sector are not uncommon. If you do a Google search for the list of fines paid by financial institutions, that list is close to $90 billion in fines,” Teng says.
Whether Binance has become an example is not a consideration. However, the exchange could be the “most regulated exchange globally,” given that Binance operates in 18 different jurisdictions.
Binance is very focused on compliance as of now. The company have grabbed the headlines for the search for strategic people to navigate the regulatory requirements in different jurisdictions.
Teng says the company has “invested a lot” in this regard, pointing to key talent in its compliance team with experience in regulatory agencies like the SEC and traditional financial institutions, including companies like Morgan Stanley and Barclays.
Building in United Arab Emirates, France
Binance remains a global operation, but the company has established two regional headquarters. The United Arab Emirates (UAE) serves as the headquarters for MENA region operations, while France is its European base.
The former region is familiar territory for Teng, who previously lived in the United Arab Emirates for nine years and served as chief executive of local regulator Abu Dhabi Global Markets. His role involved establishing a cryptocurrency framework for the local ecosystem.
“When I first came into contact with cryptocurrencies, my opinion was that this is the future of finance. But for this to really gain traction and achieve mass adoption, two elements are needed,” explains Teng.
Clarity of rules and regulations was the first consideration and the second was encouraging institutional adoption. This last point remains crucial for Teng, as it attracts investors and liquidity and drives research.
As a result, the United Arab Emirates has become a proverbial oasis for the cryptocurrency and blockchain sector. It continues to attract global players as a base of operations in the MENA region.
The implementation of European policy Markets in Cryptoasset regulations It also bodes well for Binance's prospects in the region.
“There are clear rules for operating in 27 different jurisdictions,” Teng says, providing a general set of requirements for the industry that to date has suffered from “disparity in terms of rules.”
Binance was forced to terminate your 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 serve as a means to expand into new markets through 2024 and beyond.
Putting on CZ shoes
Without a doubt, putting yourself in CZ's shoes is an unenviable task. Teng describes the Binance founder as an inspiring leader and a great mentor focused on execution.
The current president is also honest in understanding that he cannot replace CZ's role as founder and CEO, but the current landscape also lends itself to the benefits of a fresh face and new approaches.
“What I can do is bring my own values and experience to a company that is maturing. Six years ago, compared to now, Binance is totally different,” explains Teng. The new CEO will report to a board of directors, which will act as the company's governing authority.
When he has time to vent, Teng hopes to maintain routine in his private life. The CEO likes to work out, doing a combination of “weights, cardio and core.” He is also a bookworm and cites Walter Isaacson's biography of Elon Musk as his most recent reading.
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