Highlights
In the new issue of Toe the Rules, a blog series dedicated to Binance's compliance program, we get closer to our Corporate Compliance team.
Binance corporate compliance covers a wide range of disciplines, including regulatory assessment and audit management, product compliance, third-party due diligence, monitoring and testing, risk assessment and governance, policies, and learning and development.
The Corporate Compliance team helps ensure Binance adheres to legal and regulatory requirements in all aspects of its operations, maintains strong compliance controls, and continually improves its processes to stay at the forefront of the industry.
Binance is a huge global organization that employs thousands of people and serves users in many jurisdictions that have different regulatory requirements for digital asset-related activities. To responsibly promote financial freedom around the world and ensure the security of our customers, we must be confident that every internal system and business process within Binance is designed and executed in a manner that complies with all regulations. and applicable regulations. Considering Binance's size and geographic diversity, as well as the ever-evolving regulatory and crypto landscape, having a single team serving all pillars of the compliance program to design risk-based approaches and drive transparency is truly a task. colossal. The force in charge of this essential work is our Corporate Compliance team.
The scope of the team's functions includes management of regulatory assessments and audits, product compliance, third-party due diligence, quality assurance, compliance risk management and risk governance, policies and programs, and learning and development. Within Corporate Compliance there are specialized teams that deal with these lines of work.
For example, the Policy and Program team maintains and regularly updates anti-money laundering and sanctions programs that apply to Binance's suite of global products and services. The Product Compliance team works closely with the product and technology teams to ensure that risk-based AML/sanctions controls are built into each of the company's products and services. Whatever the specific approach, each of these teams is working to ensure that appropriate compliance measures are present at all levels of the organization. Leading our Binance Corporate Compliance team is Kristen Hecht, recently appointed Deputy Director of Compliance and Global Head of Money Laundering Reporting.
Binance's Approach to Compliance
At the heart of Binance's corporate compliance program is a risk-based approach that drives and shapes our commitment to user protection and a comprehensive compliance culture and strategy. It begins by carefully identifying key areas of compliance risk management for Binance, the industry, and the global regulatory environment. Based on this, our Compliance team has developed a six-step process to identify the organization's primary risk exposures, as well as a structured methodology for the identification, assessment, mitigation and ongoing monitoring of risks. Next, our Corporate Compliance team puts this methodology into practice.
Proper risk governance and leadership also play an essential role in effectively managing compliance risk at Binance. The company has internal governance and compliance risk advisory bodies that are tasked with managing compliance risks and overseeing responsibilities in line with local and global compliance standard requirements. These organs are constantly evolving.
Additionally, for all regulated entities reporting directly to a local Board of Directors and its relevant subcommittees, risk and compliance governance is enhanced to ensure regulatory requirements are met. This structure ensures the appropriate level of focus and emphasis on regulatory compliance and encourages efficient decision making by the management team.
The implementation of the compliance risk management program at Binance is based on close collaboration between various teams, accountability and ownership. Regional teams and business units feel empowered to identify and escalate issues using the processes and risk structures in place, complementing our top-down approach with an important bottom-up feedback component.
Test compliance controls across the company
An organization of Binance's scale consists of numerous business processes that flow within and across its units and divisions, and controls are in place to ensure that each of these processes is executed in accordance with all applicable rules, policies and regulations. The job of the Quality Assurance (QA) team within the Corporate Compliance department is to QA test these business processes and align them with Binance policies and local regulatory requirements. The goal of the QA framework is to periodically evaluate the quality and effectiveness of controls, as well as identify deficiencies and problems.
The Quality Assurance team monitors and tests compliance controls by sampling cases and verifying them against a predefined test script derived from relevant policy and procedure documents. Any errors and problems identified in the course of these reviews are communicated to the interested parties and teams in charge of rectifying them, and the results of these reviews are reported to the company's management.
Through consistent and regular reviews, the Quality Assurance team within Corporate Compliance promotes a culture of continuous improvement and helps ensure that compliance controls are robust at different levels within the organization.
Management of regulatory evaluations and audits
Binance routinely undergoes external regulatory assessments and audits. Preparing for this is a collaborative process involving stakeholders from the broader Compliance, Internal Audit and Assessment, Operations, and Legal team, among others. The common goal is to ensure that Binance's policies, procedures and operations meet regulatory and legal requirements in the many jurisdictions around the world where we operate.
As the global regulatory environment and associated compliance requirements are still evolving and not yet fully formed, we work hard to ensure we understand the changing landscape and continue to operate compliantly.
In each jurisdiction, Compliance, Legal and Operations work closely with local experts to ensure that compliance requirements are followed and applied to the services we provide. When it is time for a regulatory assessment and audit, whether routine or unplanned, the Corporate Compliance team collaborates with relevant local teams to provide the necessary support. Many members of the team are former regulators and examiners, so they can help significantly.
For regulated entities, the assessment and audit process is led and managed by local managers, with decision-making ultimately resting with the board of directors and senior management (including compliance and risk departments) located in the country. correspondent. Corporate Compliance is there as a shared resource to help and support local teams in the assessment and audit process.
Compliance Training for Binance Employees
The primary goal of our compliance program is to ensure that every Binance employee has sufficient awareness of compliance requirements and understands the importance of a strong compliance culture across the company, which underpins our commitment to protecting users. We require that all employees receive regular compliance training. Through these mandatory training programs, the Compliance Learning and Development team promotes a culture of compliance in the organization and ensures that all employees understand and comply with legal and regulatory requirements.
Each Binance employee must go through a series of global compliance training modules covering essential topics such as anti-money laundering and countering the financing of terrorism, sanctions compliance, anti-bribery and corruption, the prevention of market abuse and personnel treatment policies. These trainings include assessments that each employee must successfully complete within a limited time period.
In addition to mandatory training, the compliance training team identifies specific training needs for Binance using a variety of methodologies, such as surveys, interviews, knowledge assessments, as well as monitoring relevant regulatory developments. Based on the training needs assessment, the team creates e-learning programs that meet up-to-date regulatory requirements, industry best practices, and organizational policies. The team also develops advanced training programs tailored to the management team that focus on the compliance duties and obligations that a leader must understand.
Binance also encourages and sponsors employees to obtain globally recognized accreditations through professional organizations such as the Association of Certified Anti-Money Laundering Specialists (ACAMS) and the Association of Certified Sanctions Specialists (ACSS).
The overall effectiveness of training programs is evaluated by collecting feedback from participants and conducting assessments to measure retention and application of knowledge. The results are used to identify any gaps or areas of improvement to apply necessary revisions to training materials or delivery methods.
Conclusions
Binance's Corporate Compliance team plays a key role in maintaining the integrity and security of the organization while ensuring compliance with applicable rules and regulations. The ever-evolving regulatory landscape for digital assets demands a comprehensive and proactive approach to compliance. By focusing on the key areas detailed above, the Corporate Compliance team delivers on the commitment to protect users in accordance with global regulatory standards.
You might also be interested…
Playing by the rules: The current landscape of crypto sector compliance
Play by the rules: Binance Compliance Program overview
Experience in the Binance Compliance team
Risk Warning: Digital assets are subject to high market risk and price volatility. The value of your investment could increase or decrease, and you may not get back the amount invested. You alone are responsible for your investment decisions and Binance is not responsible for any losses you may incur. Past performance does not guarantee future performance. You should only invest in products that you are familiar with and whose risks you fully understand. You should carefully evaluate your investment experience, financial situation, investment objectives and risk tolerance, and consult an independent financial advisor before making any investment. This material should not be construed as financial advice. For more information, please see our Terms of Use and Risk Warning.