Richard Teng, the new CEO of the world’s leading cryptocurrency platform, emphasised the need of regulatory compliance for Binance’s future success, months after its former CEO pled guilty to breaking US anti-money laundering laws and paid $4.3 billion to settle charges.
Similarly, Binance has lately been under scrutiny by the Nigerian government, with the Central Bank of Nigeria blaming the company for the naira’s depreciation against the dollar.
A second raid by security forces resulted in the incarceration of two employees, an American, Tigran Gambrayan, and a British Kenyan, Nadeem Anjarwalla.
Binance would suspend all of its offerings in Nigeria, including deals involving the naira and the USDT stablecoin. It stated that Nigeria was “not yet” one of its top markets, but it has “extraordinary potential and we hope to continue to invest there.”
In an interview during a visit to Paris for a cryptocurrency industry meeting to address the recent penalties, Teng stated that he intends to retain Binance as a “user-focused, user-first organisation,” which has contributed to its success.
But he said Binance also needs to be compliance-focused, and the additional regulation of the sector would provide greater clarity for industry players.
“We want to make sure that compliance is, also becomes, a competitive advantage” for Binance, Teng said Tuesday.
He said Binance had spent hundreds of millions of dollars on compliance and was working very closely with regulators, including putting into place at their insistence a global board of directors with three independent directors.
“Our board of directors will become our stewards guiding us in terms of direction to go, making sure that we adopt the best practices,” Teng said.
Binance was created in 2017 and cornered much of the crypto-trading market, turning its founder and chief executive Changpeng Zhao into a billionaire.
Binance runs crypto exchanges and provides other services around the world, but it took a severe hit when crypto markets collapsed and regulators began probing the legality of its business.
The volatile industry surged in 2021 with a range of complex products and celebrity endorsements propelling it to a valuation of over $3 trillion in 2022.
A series of scandals, including the November 2022 collapse of Binance’s main rival exchange FTX and criminal charges for several industry executives, saw public confidence evaporate and investors pull their money out of crypto.
As part of a settlement reached last November with US authorities, Zhao pleaded guilty to violating US anti-money laundering laws and agreed to step down from his position. Binance agreed in February to pay $4.3 billion to settle charges.
“CZ stepped down in November last year, taking accountability and responsibility, for some of the past mistakes that we made,” Teng said, referring to Zhao, who was often referred to by his initials in the industry.
But the crypto industry has bounced back in recent months, thanks in large part to US regulators giving the go-ahead for exchange-traded funds (ETFs) in bitcoin which allow investors to trade the asset without actually opening a crypto account.
That helped Bitcoin set a record price of over $73,000 last month, recovering from below $20,000 at the beginning of 2023.
Teng expressed long-term confidence in Bitcoin, but also in the short term with an approaching halving, when the reward to miners splits in half. He said bitcoin has usually set record highs after halving, but this time it had done so before a halving expected later this month due to the ETF.
“After the halving, we remain bullish,” Teng said.
We Will Work With Nigeria
Despite denying any wrongdoing in a statement posted on its website, it stated it was committed to working with the Nigerian authorities
”In light of recent events, we would like to showcase our dedication to promoting the responsible growth of crypto in Nigeria with some facts and numbers.
”We will continue to work with Nigerian authorities to bring our friends and colleagues home.”
”They are professionals with the highest integrity and we will provide them and their families with all the support we can.”
“We trust there will be a swift resolution to this matter,” it also read.
Tax Evasion Charges
The Federal Government took legal action against the cryptocurrency exchange platform in a bid to uphold fiscal responsibility and preserve the economic integrity of the nation
The charges levelled against Binance included allegations of non-payment of Value-Added Tax (VAT), Company Income Tax, failure to file tax returns, and complicity in aiding customers to evade taxes through its platform.
Furthermore, the Federal Government also accused Binance of neglecting to register with FIRS for tax purposes and contravening existing tax regulations within the country.
The charges also outlined specific instances where Binance allegedly violated tax laws, such as the failure to issue invoices for VAT purposes, thereby impeding the determination and payment of taxes by subscribers.