“We Just Want To Put It Behind Us”: Crypto Exchange Binance Expects To Pay Fines To Resolve U.S. Regulatory Investigations

Crypto exchange giant Binance, which has come under scrutiny since the implosion of FTX and the resultant “crypto winter” that followed, now looks like it may be able to escape its current regulatory scrutiny by paying fines. The news, which broke late in the day on Wednesday, appeared to help fuel a charge in the price of bitcoin, which was already rallying mid-week. 

Among the regulators that are investigating the crypto outfit are the Department of Justice, Internal Revenue Service, the Securities and Exchange Commission and Commodity Futures Trading Commission.

Chief Strategy Officer Patrick Hillmann told the Wall Street Journal this week that the outcome of settlement discussions with U.S. regulators would result in “likely a fine, could be more….We just don’t know. That is for regulators to decide.”

Binance is “working with regulators to figure out what are the remediations we have to go through now to make amends for that,” he said. 

He also said in an interview with BNN that the company had regulatory “gaps” that it has since closed. He blamed the initial gaps on a thin staff and little compliance, stating on Wednesday of this week: “It’s a tremendous burden. As a result, there were some gaps in our compliance system in the first two years.”

He called “ongoing conversations” with regulators “very collaborative” and said the discussions and compliance fixes are ”greatly to the benefit of users.” He said Binance is “highly confident and feeling really good about where those discussions are going.”

All the while, regulators in the U.S. have been on a tear in going after other crypto-associated firms, as BNN notes:

In January, Binance was named among counterparties to digital-asset platform Bitzlato, which has been accused of processing millions of dollars in illegal funds. 

This month, a New York regulator told Binance’s partner Paxos Trust Co. to stop minting a Binance-branded stablecoin known as BUSD. The regulator told Paxos to halt new issuance over unresolved issues tied to Paxos’s oversight of its relationship with Binance. The SEC separately has sent Paxos a notice alleging that BUSD, the third-largest stablecoin, is an unregistered security.

The company’s compliance department now numbers more than 750 employees, the BNN report noted. 

“It will be a good moment for our company because it allows us to put it behind us,” Hillmann said. “We just want to put it behind us.”