Binance Expects to Pay Penalities to Settle with U.S. Regulators

Binance, the global blockchain company behind the world's largest digital asset exchange by trading volume and users, expects to pay monetary penalties to settle existing U.S. regulatory and law-enforcement investigations of its business, saying Patrick Hillmann, Chief Strategy Officer at the crypto exchange.

Hillmann explained that Binance grew quickly and began as a business powered by software engineers unfamiliar with laws and rules written to address the risk of bribery and corruption, money laundering, and economic sanctions. The exchange has been working to fill gaps in its early compliance efforts, he added. Still, they expect U.S. regulators will impose fines for their past violations.

Binance is currently being investigated by the U.S. Department of Justice (DoJ) for its possible violations of U.S. money laundering laws. Meanwhile, the Commodity Futures Trading Commission (CFTC) is conducting a separate investigation into the company's offering of crypto derivatives to customers in the US without obtaining the necessary licenses. 

Hillmann said Wednesday that Binance is "working with regulators to figure out what are the remediations we have to go through now to make amends for that." The outcome will be "likely a fine, could be more....We just don’t know. That is for regulators to decide."

Earlier this week, New York's chief financial regulator has ordered Paxos, the company behind the stablecoin of Binance, to stop issuing Binance USD (BUSD)​ stablecoin. Paxos said in a statement that it would stop issuing new BUSD as of Feb. 21 and would continue to support and redeem pre-existing BUSD until "at least February 2024."