Today, we are pleased to inform you that we have reached resolutions with the US Department of Justice, CFTC, OFAC, and Financial Crimes Enforcement Network regarding their investigations into issues related to prior registrations, compliance, and sanctions. These decisions hold our company accountable for past compliance violations and allow our company to turn the page on a challenging but important chapter for further learning and growth. With the compliance and governance improvements laid out in our Commitments, we can begin to share our vision for the exciting future of Binance and the future of the cryptocurrency space. We are confident that Binance will emerge as a stronger company as we lay the foundation for the next 50 years.
Although Binance is not perfect, it has strived to protect users since its early days as a small startup and has gone to great lengths to invest in security and compliance. However, when Binance first launched, it did not have adequate compliance controls in place for the company it quickly came to own, and it should have. Binance grew at an extremely rapid pace globally, in a new and evolving industry that was in the early stages of regulation, and Binance made undisciplined decisions along the way. Today, Binance takes responsibility for this past chapter.
Over the past two years, we have worked hard to restructure our organization, our people, and modernize our systems. We have new leadership with deep compliance experience and impressive backgrounds from top traditional financial institutions and leading technology companies to law enforcement agencies and major commercial entities. Through this process we have become a stronger and more secure platform for our users.
Just as importantly, we've never faltered in upholding our core values of user security and safety. We take our responsibility as custodians seriously and maintain 1:1 backing for every user asset.* This means that users can withdraw 100 percent of their assets from the platform at any time. It should be noted that in our decisions with US agencies:
They do not accuse Binance of embezzling any users' funds
They do not accuse Binance of engaging in any market manipulation.
Having leaders with global experience has enabled Binance to grow over the long term. Our work is focused on protecting our users and building a platform for decades to come. This focus and expertise brings additional flexibility so we can continue to work on behalf of our users not just for the next five years, but for the next 50 years or more. Our former CEO remains the majority shareholder of Binance and an available resource for consultation on historical areas of our business.
Positioning ourselves for the next 50 years means understanding the current challenges that digital currencies face and working to develop industry-leading standards to address them, including in the areas of compliance, security, cooperation with law enforcement agencies, and transparency.
As a result of these updates and work with global regulators, Binance is a much stronger company today than it was in the past. We have learned valuable lessons that are applicable across the industry to support cryptocurrency users. We recognize that alongside compliance, transparency is essential to rebuild industry confidence amid challenging market conditions and industry mismanagement. Learning from our past, we are proud to have made some of the most significant investments in compliance, security and transparency of any company in our industry.
Change leadership
Effective immediately, Richard Teng, former General Head of Regional Markets at Binance (Binance), will succeed CZ as CEO. Richard is a highly qualified leader and with over three decades of experience in financial and regulatory services, he will lead the company through its next period of growth. Prior to joining Binance, Richard was CEO of the Financial Services Regulatory Authority of the Abu Dhabi Global Market; Chief Regulatory Officer at the Singapore Exchange (SGX), and Director of Corporate Finance at the Monetary Authority of Singapore.
Compliance and security
Binance is systematically restructuring our organization and people, upgrading our systems, and creating a new standard for compliance. For example, we have updated and expanded our internal anti-money laundering (“AML”) detection and analysis capabilities. Binance's anti-money laundering (AML) compliance is now an industry standard, and Binance continues to make improvements to its comprehensive AML policies. Binance also plays an important leadership role in assisting law enforcement authorities in combating cyber and financial crimes and terrorism.
Binance was one of the first major exchanges outside the US to require mandatory KYC verification procedures for all users. Today, potential users (none of whom may be a US person) must present a valid ID and submit a “selfie,” which Binance verifies their identity with the support of global suppliers. Binance also conducts searches via World-Check to identify, for example, any criminal record, terrorist connection, inclusion on Politically Exposed Persons (PEP) lists, or sanctions watch lists. Binance also uses real-time monitoring and post-transaction monitoring tools to detect and stop suspicious transactions. In recent years, Binance has invested enormous resources to strengthen its compliance program. Today, Binance has new leadership with deep compliance backgrounds overseeing a team of hundreds of employees supporting compliance, including more than 60 employees with prior law enforcement or regulatory agency experience and more than 200 employees with professional compliance certifications. , including certified anti-money laundering specialists. In addition to its core compliance team, Binance employs hundreds of dedicated operations, product, and technology employees who support the development and implementation of the company's compliance programs.
Binance takes sanctions compliance seriously and has an independent sanctions team that ensures the organization diligently complies with global sanctions rules. Binance has also devoted significant resources and efforts to complying with the sanctions. Today, in addition to KYC and IP blocking, Binance uses advanced third-party tools to voluntarily implement controls and restrictions related to sanctions laws in countries including the United States, including conducting real-time cross-chain sanctions transaction monitoring and screening.
Law enforcement cooperation
Binance also employs multiple teams that regularly engage with law enforcement agencies and officials, which collectively include more than 70 members. Binance has proactively exposed and assisted law enforcement in addressing national security issues in countries around the world, including the United States. Moreover, from January 1 to November 13, 2023, Binance processed more than 52,700 law enforcement requests, serving 12,699 registered law enforcement officers worldwide through the government law enforcement request system. This is in addition to the more than 50,000 orders that the Binance team processed in 2022.
Binance is proactively sharing knowledge with law enforcement. In 2022, Binance conducted and participated in more than 70 workshops to train law enforcement agencies on combating cyber and financial crimes around the world. Building on these efforts, in September 2022 Binance announced a formal global law enforcement training program designed to help law enforcement detect and combat financial and cybercrime.
In 2023, our dedicated law enforcement training team, supported by our investigations team, delivered 120 on-site or online training courses and workshops that have always received a very positive response from the law enforcement community.
Binance is pleased to be one of the most important global law enforcement partners in its fight against illicit financial activity around the world.
Commitment to transparency
Binance carefully protects its clients' assets. Users can always withdraw 100 percent of their assets from the platform at any time. As part of its commitment to transparency, Binance has shared its cold and hot wallet addresses, as well as its published Merkle Tree directory of reserves and proof of collateral for B-Tokens.
Binance has also created security measures for users including a credit insurance fund to protect users from losses when cross/isolated borrowing requirements are less than zero or when a user is unable to repay their debts. Binance is one of the first cryptocurrency exchanges to have a safe fund – known as the Secure Asset Fund for Users (“SAFU”) – to protect users in extreme cases. Binance has published wallet addresses for SAFU.
Binance combines its security measures with educational initiatives to allow users to protect themselves and better understand the cryptocurrency ecosystem. As part of its commitment to promoting cryptocurrency education for all, Binance has made more than 430 articles publicly available on Binance Academy, as well as terminology introductions and in-depth courses on cryptocurrencies in 30 languages; It has collaborated with more than 70 universities in 25 countries to provide knowledge related to digital currencies and Web3; It collaborated with local partners to launch an anti-fraud campaign to enable users to identify and avoid fraudsters.
The future of digital currencies
We strongly believe that the cryptocurrency space and Binance have a bright future.
We have built a community and ecosystem that enables people to harness the power of blockchain technology to unlock opportunities for their families, communities and economies around the world, and we are committed to ensuring that the transformative power of these technologies can be experienced by more people around the world.
*Note: Assets in Earn accounts are sometimes backed by collateral in a different token than what was invested, although this should not impact Binance's ability to honor 1:1 redemptions.