To Get Regulators Off Its Back, Binance Intends To Pay A Fine

There are reports that Binance is expected to pay a fine in order to settle an investigation by law enforcement and regulators, according to a report. In the report, one of Binance's executives lamented what he called a "very confusing time" for the industry.

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Patrick Hillman, Binance's chief strategy officer, told Trade Algo the exchange had been working on compliance measures to address regulators' concerns, but still expected to pay a monetary settlement.

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The DOJ has been investigating Binance for possible violations of anti-money laundering laws, Trade Algo reported, citing sources. Commodity Futures Trading Commission (CFTC) is investigating whether the exchange offered derivatives to US customers without registering the activity.

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A group of software engineers at the crypto exchange grew rapidly because they were unfamiliar with laws and written rules regarding things like bribery and corruption, money laundering, and economic sanctions, creating gaps in compliance, according to Hillman.

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Binance's discussions with the investigators resulted in "likely a fine, could be more....We don't know. That is for regulators to decide." he told Trade Algo.

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"It will be a good moment for our company because it allows us to put the past behind us," Hillman said.

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The Securities and Exchange Commission (SEC) has been leading a campaign against crypto firms. A $30 million settlement was reached last week between the regulator and Kraken over its "staking" program.  

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As Binance tried to understand how regulators plan to oversee the crypto industry, Hillman said the crackdown made it a "very confusing time for us."

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A report in Trade Algo this week reported that the SEC was planning to sue Paxos over its Binance-branded stablecoin, which New York regulators then ordered Paxos to stop minting.

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Binance's CSO told Trade Algo that Paxos' case "would have a long-lasting chilling effect in the United States."

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In addition, Trade Algo requested comments from Binance, the DOJ, and the CFTC, but none of them responded immediately.

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