We are pleased to inform you today that we have reached resolutions regarding past registration, compliance and enforcement investigations with the U.S. Department of Justice, the Futures Trading Commission, the Office of Foreign Assets Control and the Financial Crimes Enforcement Network. These solutions acknowledge our company's responsibility for past criminal compliance violations and enable our company to turn the page on a challenging yet transformative chapter of learning and growth. With compliance and governance improvements built into our commitments, we can begin to share our vision for the exciting future of Binance and the future of the crypto industry. As we lay the foundation for Binance for the next 50 years, we have full confidence that our company will emerge stronger.
While Binance isn't perfect, it has strived to protect users since its early days as a small startup and has put tremendous effort into investing in security and compliance. However, when Binance first launched, it did not have adequate compliance controls for the company it has rapidly become, but it should have. Binance has grown extremely rapidly globally in a new and emerging industry that is in the early stages of regulation, and Binance has made misguided 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 and staff and improve our systems. We have new leadership with deep compliance experience and impressive track records, ranging from top traditional financial institutions to leading technology companies, legal practices and large enterprise organizations. Thanks to this process, we have become a stronger, safer and even more secure platform for our users.
Equally important, we have never hesitated to uphold our core values of user safety and security. We take our responsibility as a custodian very seriously and provide 1:1 support for every user asset.* This means users can withdraw 100 percent of their assets from the platform at any time. According to the agreement reached with US institutions:
Binance uses any user funds.
Binance is not alleged to have engaged in any market manipulation.
Our trusted team of global leaders has positioned Binance for long-term growth. Our business is focused on protecting our users and building a platform for decades to come. This focus and experience provides greater flexibility so that we can continue to operate on behalf of our users not just for the next five years, but for the next fifty years or more. Our former CEO is also the majority shareholder of Binance and continues to be a resource we can consult on historical areas of our business.
Positioning ourselves for the next fifty years means understanding crypto's current challenges and working to develop industry-leading standards to address them, including in the areas of compliance, security, cooperation with regulatory authorities, and user 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 can be applied industry-wide to support crypto users. We recognize that transparency, as well as compliance, are crucial to rebuilding trust in the industry amid challenging market conditions and industry mismanagement. Learning from our own history, we are proud to have initiated some of the most significant investments in compliance, security and transparency of any company in our industry.
Leader Change
Richard Teng replaced CZ as CEO. A highly qualified leader, Richard, with over thirty years of financial services and regulatory experience, will continue to lead the company in his new role through its next period of growth. Prior to joining Binance, Richard served as CEO of the Financial Services Regulatory Authority at Abu Dhabi Global Market; He served as Chief Regulatory Officer at the Singapore Exchange (SGX) and as Director of Corporate Finance at the Monetary Authority of Singapore.
Compatibility and Security
Binance is systematically working to restructure our organization and staff, improve our systems, and set a new industry standard in compliance. For example, we have updated and expanded our internal anti-money laundering (“AML”) detection and analysis capabilities. Binance's AML compliance is now an industry standard and Binance continues to make improvements to its comprehensive AML policies. Binance also plays a key leadership role in helping legal authorities combat cyber and financial crimes and terrorism.
Binance became one of the first major exchanges outside the United States to require mandatory KYC procedures for all users. Today, potential users (outside the US) must present a valid ID and submit a “selfie” photo, which Binance matches with their ID with the support of its vendors around the world. Binance also conducts searches through World-Check to identify, for example, any criminal history, links to terrorism, appearance on Politically Exposed ("PEP") lists, and sanctions watch lists. Binance also uses both real-time and post-transaction monitoring tools to detect and stop suspicious transactions. Binance has invested tremendous resources to improve its compliance program in recent years. Today, Binance is a new company with deep compliance backgrounds overseeing a team of hundreds of compliance support staff, including more than 60 staff with prior regulatory or legal authority experience and more than 200 staff with professional certifications in compliance, including Certified AML Specialists. has leadership. In addition to its core compliance team, Binance employs hundreds of dedicated operational, product and technology employees who support the development and execution of the company's compliance programs.
Binance takes sanctions compliance seriously and has an independent enforcement team that ensures the organization diligently adheres to global sanctions rules. Binance has also devoted significant resources and efforts to sanctions compliance. Today, in addition to KYC and IP blocking, Binance uses advanced third-party tools, including real-time on-chain sanction transaction monitoring and scanning, to voluntarily enforce controls and restrictions related to sanctions laws of countries including the United States.
Cooperation with Regulators
Binance also employs multiple teams, totaling over 70 employees, who regularly engage with law enforcement and authorities. Binance has proactively assisted regulatory authorities in addressing national security issues in countries around the world, including the United States. Moreover, between January 1 and November 13, 2023, Binance processed more than 52,700 legal authority requests and served 12,699 registered legal authorities worldwide through the Government Law Enforcement Request System. This is in addition to the more than 50,000 requests the Binance team has processed in 2022.
Binance proactively shares its information with regulators. In 2022, Binance organized and participated in over 70 workshops training regulators around the world on combating cyber and financial crimes. Building on these efforts, in September 2022, Binance announced an official Global Regulatory Training Program designed to help regulators detect and combat financial and cybercrime.
In 2023, our dedicated Regulatory Training Team, together with support from our Investigations Team, delivered 120 on-site or online training and workshops, which always received a very positive response from the regulatory community.
Binance is pleased to be one of the most important global partners of regulators in their fight against illegal financial activities around the world.
Transparency Commitment
Binance carefully protects its customers' assets. Users can withdraw 100 percent of their assets from the platform at any time. As part of its commitment to transparency, Binance has published Merkle tree reserve proofs and collateral proofs for B-Tokens, in addition to sharing cold and hot wallet addresses.
Binance has also built in user security measures, including the Margin Insurance Fund, to protect users from losses when their cross/isolated margin equity is less than zero or a user is unable to repay their debts. Binance is one of the first cryptocurrency exchanges to have a secure fund, known as the Safe Asset Fund for Users (“SAFU”), to protect users in emergencies. Binance has publicly disclosed wallet addresses for SAFU.
Binance combines security measures with educational initiatives so users can protect themselves and better understand the cryptocurrency ecosystem. As part of its commitment to advancing cryptocurrency education for everyone, Binance has made publicly available more than 430 articles on Binance Academy, as well as cryptocurrency-related glossary entries and in-depth courses in 30 languages; It has collaborated with more than 70 universities in 25 countries to deliver cryptocurrency and Web3 information, and launched an anti-fraud campaign by collaborating with local partners to empower users to detect and avoid scammers.
The Future of Crypto
We truly believe that the crypto industry and Binance have a bright future.
We have built a community and ecosystem that enables individuals to leverage the power of blockchain technology to create opportunities for their families, communities and economies around the world, and we are committed to ensuring the transformative power of these technologies is experienced by more people around the world.
*Note: Assets held in earning accounts are sometimes backed by collateral in a different token than the one invested in, but this should not impact Binance's ability to honor redemptions on a 1:1 basis.