Cointime

Download App
iOS & Android

Binance is now 'totally different': Interview with CEO Richard Teng

Binance CEO Richard Teng has assured the “gaps in compliance” from the early days of Binance are firmly in the past and that the crypto exchange is now "totally different.”  

Teng, the former head of regional markets for Binance, was elevated to the position of CEO on Nov. 21 after Changpeng 'CZ' Zhao stepped down from the role, pleading guilty to charges levied against him by the U.S. Department of Justice.

“As part of the settlement, CZ cannot be involved in the day-to-day running of the company’s operations,” Teng explained.

Despite that, the incumbent CEO of Binance cuts the figure of a man reveling in the challenges ahead. Speaking to Cointelegraph just two weeks after taking over from outgoing CEO Changpeng 'CZ' Zhao, Teng seems to relish being at the helm of the world’s largest cryptocurrency exchange:

“I’m taking the baton and pushing ahead with our growth agenda while working very closely with global regulators.”

Teng believes that the “overcast” conditions clouding Binance in recent months are lifting following its staggering $4.3 billion settlement with the United States Justice Department relating to a raft of violations of U.S. regulations and sanctions programs.

$4.3B settlement a result of early gaps in compliance

The exchange has paid dearly for mistakes made during its meteoric growth from 2017 onwards. Teng recalls how Zhao built Binance from a team of six people to a global operation consisting of thousands of employees that serves a user base estimated to be more than 166 million.

“In those very early days while we were building up the company, there were gaps in terms of compliance. That resulted in all these breaches and mistakes, but these are historical issues."

The shortcomings of its early compliance regime have led to the largest crypto-related settlement in U.S. history. However, Teng contends the company has always ensured its user funds, security, and safety have remained “sacrosanct."

“U.S. agencies have scrutinized our operations in great detail for us to reach this settlement, and there's no allegation of any misappropriation of user funds,” he adds.

Binance’s obligations to U.S. authorities

Binance is now left to shoulder the ongoing cost and scrutiny that its settlement with U.S. authorities involves. This includes a five-year monitorship and significant compliance undertakings to ensure “Binance’s complete exit from the United States."

Teng wouldn’t be drawn into the details of Binance.US’s ongoing legal battle with the U.S. Securities and Exchange Commission (SEC) over alleged securities violations. Still, he maintains the company has factored in the costs of meeting the requirements set out in its settlement and its case with the SEC.

The Binance CEO is also bound to non-disclosure agreements relating to its $4.3 billion settlement and would not comment on the means of payment of the penalty. Cointelegraph understands that Binance is in the process of paying its assessment, while a separate case brought against CZ will be paid personally by the former CEO.

The company also confirmed that the movement of some $3.9 billion worth of USDT tokens reported on Nov. 21 was “unrelated to resolution matters" with the U.S. Justice Department.

Was Binance treated unfairly?

Prominent figures in the cryptocurrency space, including former BitMEX CEO Arthur Hayes and Galaxy Digital’s Mike Novogratz, have commented on the disparity between the treatment of Binance and mainstream finance firms in recent years.

Teng weighed in on the perception that “Wall Street Banks” have not been subject to the same treatment despite arguably even bigger failings.

“Fines in terms of the financial sector are not uncommon. If you do a Google search of the list of fines paid by financial institutions, that list is close to $90 billion in fines,” Teng says.

Whether Binance has been made an example of is not a consideration. Nevertheless, the exchange could be the “most regulated exchange globally”, given that Binance operates in 18 different jurisdictions.

Binance is keenly focused on compliance from now on. The company has grabbed headlines for headhunting strategic individuals to navigate regulatory requirements in different jurisdictions.

Teng says the company has “invested heavily” in this regard, pointing to key talent in its compliance team with backgrounds in regulatory agencies like the SEC and traditional financial institutions, including the likes of Morgan Stanley and Barclays.

Building out of UAE, France

Binance remains a global operation but the company has set down two regional headquarters. The United Arab Emirates (UAE) serves as its headquarters for MENA region operations, while France is its European base.

The former region is familiar territory to Teng, who previously lived in the UAE for nine years and served as CEO for local regulator Abu Dhabi Global Markets. His role involved laying down a cryptocurrency framework for the local ecosystem.

“When I first got in touch with crypto, my take was this is the future of finance. But for this to really gain traction and for mass adoption to be brought about, you need two elements,” Teng explains.

Clarity of rules and regulations was the first consideration, and the second was fostering institutional adoption. The latter point remains crucial to Teng as it brings in investors and liquidity and drives research. 

As a result, the UAE has emerged as a proverbial oasis for the cryptocurrency and blockchain sector. It continues to attract global players as a base of operations in the MENA region.

The implementation of Europe’s Markets in Crypto-Assets regulations also bodes well for Binance’s prospects in the region.

“You have clarity of rules to operate in 27 different jurisdictions,” Teng says, which provides a blanket set of requirements for the industry that has to date suffered from “disparity in terms of rules”.

Binance was forced to terminate its services in the Netherlands in June 2023 after failing to satisfy registration requirements to obtain a local virtual asset service provider (VASP) license. MiCA could serve as a means to expand into new markets through 2024 and beyond.

Stepping into CZ shoes

Undoubtedly, stepping into CZ’s shoes is an unenviable task. Teng describes Binance’s founder as an inspirational leader and great mentor focused on execution.

The incumbent is also honest in his understanding that he cannot replace CZ’s role as a founder-CEO, but the current landscape also lends to the merits of a fresh face and new approaches.

“What I can do is bring my own values and expertise to the table in a maturing company. Six years ago, compared to now, Binance is totally different."

The new CEO will report to a board of directors, which will act as the governing authority of the company.

If and when he has time to blow off some steam, Teng hopes to maintain routine in his private life. The CEO enjoys exercising, doing a mix of “weights, cardio and core”. He’s also a bookworm, citing Elon Musk’s biography by Walter Isaacson as his most recent read.

Comments

All Comments

Recommended for you

  • On Compressionism

    How a technological necessity is becoming the face of a burgeoning realm of cryptoart

  • Ethereum: The Infinite Story Machine 💫

    Yesterday, the first issue of the new ETH Investors Club (EIC) magazine went live digitally, with physical copies redeemable via NFTs on the way. The EIC effort is focused on spotlighting Ethereum’s current landscape through high-quality essays, and I’m honored that my piece, The Infinite Story Machine, was featured in the inaugural “Culture Corner” section.

  • BuildBear Labs Raises $1.9M to Accelerate Development of Web3 Tools for Secure dApp Creation

    Singapore-based BuildBear Labs has secured $1.9m in funding from investors including Superscrypt, Tribe Capital, and 1kx, as well as angel investors such as Kris Kaczor and Ken Fromm. The funds will be used to speed up development of the company's flagship platform, which provides developers with testing and validation solutions for secure decentralized applications. BuildBear Labs' platform is dedicated to dApp development and testing, offering developers the ability to create customised Private Testnet sandboxes across multiple EVM and EVM-compatible blockchain networks, with features including private faucets for unlimited Native and ERC20 token minting.

  • I Don't Like Layer 2 Anymore

    I had been quite vocal about Optimism on Twitter when it was trading at north of 5bn FDV back in June last year with a view that this red coin is criminally undervalued.

  • OnChainMonkey: Reimagining Bitcoin NFTs

    Exploring Ordinals As a Medium for Art and Programmability

  • Collusion-Resistant Impartial Selection Protocol (CRISP)

    We propose the Collusion-Resistant Impartial Selection Protocol (CRISP) to improve on MACI’s honest Coordinator assumption. By leveraging threshold cryptography and fully homomorphic encryption (FHE), we enable a distributed set of Coordinators (a “Coordinator Committee”) and shift the trust model from an honest Coordinator assumption to an assumption that there is no threshold of dishonest Coordinators in the Coordinator Committee. We propose to increase the trust model further by introducing economic disincentives for compromised Coordinators.

  • Multiple incidents of stETH being stolen and cross-chained to the Blast mainnet were discovered. The victim’s mnemonic words/private keys may have been leaked.

    SlowMist founder, Yu Xian, posted on X platform stating that SlowMist and MistTrack have received at least four cases of stETH being stolen and cross-chain transferred to the Blast mainnet. The common feature is that a small amount of ETH transaction fee is sent from an address with obvious traces (including exchanges) to the stolen address, and then stETH is cross-chain transferred to the Blast mainnet for subsequent transfer, and finally the remaining small amount of ETH in the victim's address is transferred to different ETH addresses. The known loss exceeds 100 stETH, and it is likely a group event. The mnemonic phrase/private key of these victims must have been leaked, and the attackers lurked to start on the Blast mainnet. Previously, Scam Sniffer monitoring showed that a certain address lost over 10 BTC pledged on Aave and some PANDORA due to interaction (clicking on the signature authorization) with a fake Blast airdrop website, with a total loss of approximately $717,817.

  • Hong Kong has closed the application for virtual asset trading platform licenses, and a total of 22 virtual asset trading platforms are waiting for approval.

    The Hong Kong Securities and Futures Commission website shows that the deadline for virtual asset trading platform license applications was yesterday (29th). As of the update on February 28th, there were a total of 22 virtual asset trading platform applicants.The applicants include Bybit, OKX, Crypto.com, Gate.io, HTX, Bullish, and others.Ammbr, BitHarbour, and Huobi HK withdrew their applications, while Meex had its application returned by the Securities and Futures Commission.In addition, virtual asset trading platforms operating in Hong Kong that did not submit license applications to the Securities and Futures Commission by yesterday (29th) must end their business in Hong Kong by May 31, 2024, at the latest.

  • In February, NFT sales on the Bitcoin chain were approximately US$301 million, down nearly 10% from the previous month.

    According to cryptoslam data, the sales of NFTs on the Bitcoin blockchain in February reached $301,983,035.33, a decrease of nearly 10% from the previous month's $335,121,977.66, and the fourth-highest monthly sales to date. The total number of NFT transactions on the Bitcoin blockchain in February was approximately 203,000, a decrease of about 18.4% from the previous month. In addition, there were 67,139 independent buyers and 57,724 independent sellers of NFTs on the Bitcoin blockchain last month.

  • Attorneys general of many U.S. states: SEC is expanding the definition of “investment contract”

    Law enforcement officials from Montana, Arkansas, Iowa, Mississippi, Nebraska, Ohio, South Dakota, and Texas submitted a joint amicus brief (or friend of the court brief) to the United States Securities and Exchange Commission in the lawsuit against Kraken on Thursday. The brief states that the states are not supporting the exchange, but rather opposing federal regulatory agencies. If the SEC wins, it may prioritize state consumer protection laws and state regulations surrounding cryptocurrencies.