Binance CEO Hails Political Shift in Cryptocurrency Landscape
Richard Teng, the chief executive of Binance Holdings Ltd., expressed optimism about the current state of the cryptocurrency industry during an event hosted by the Foreign Correspondents Association in Singapore on September 17, 2024. He described the changes brought about by the Trump administration as a “fantastic” reset for the sector. “It’s a markedly different environment for us now,” Teng stated in an interview with CNBC.
In just over a year, Binance has transitioned from being viewed as a regulatory outcast to potentially becoming a key player in Washington. Once notorious for its defiance against regulations, Binance faced a staggering $4.3 billion settlement with authorities and had to remove its billionaire founder, Changpeng “CZ” Zhao, from his position. Under President Donald Trump’s second administration, however, the exchange is now navigating a significantly more favorable political climate, as noted by Teng. “We have reaped the benefits of this shift,” he added, having taken on the role of CEO in November 2023.
Potential Partnerships with Trump Family and Financial Institutions
Teng’s remarks come amid reports that Binance is in discussions for the Trump family to acquire a financial stake in the company. Earlier this month, The Wall Street Journal highlighted these negotiations, while Bloomberg reported that World Liberty Financial, a Trump-associated crypto bank yet to launch, is in talks with Binance to develop a dollar-pegged stablecoin. If these partnerships materialize, they would signify a remarkable turnaround for Binance, once considered a pariah in political circles.
Cautiously addressing the ongoing discussions, Teng remarked, “I believe both World Liberty Financial and CZ have denied the reports.” He also clarified the distinction between Binance.US and Binance.com, stating, “.US and .com are quite different entities, with separate shareholders, boards of directors, and management.” This separation was implemented to protect its U.S. operations from the broader international business amid regulatory pressures.
Positive Developments for the Cryptocurrency Sector
Despite the operational differences, Teng remains optimistic about the implications of the new political environment for cryptocurrency. “We shifted from four years of Operation Choke Point 2.0 to a presidency that is very pro-crypto and pro-AI,” he remarked. While Binance.com does not operate within the U.S. market, he emphasized, “We’ve gained from all these pro-crypto policies.” Operation Choke Point 2.0 refers to the alleged crackdown on digital asset firms by traditional banks during the Biden administration.
Teng described a swift global expansion, with Binance increasing its user base from 170 million to 265 million in just one year. “We’ve been approached by numerous governments worldwide,” he noted, highlighting regulatory advancements in countries such as Japan, Australia, Hong Kong, Brazil, Argentina, and the UAE. Binance now holds licenses in 21 jurisdictions, extending its influence far beyond any single nation, which includes sovereign wealth funds beginning to allocate resources to crypto, according to Teng.
Challenges from Binance’s Troubled History
However, amid this optimism lies the complicated history of Binance. Zhao, the company’s founder and former CEO, faced criminal charges and served a brief prison term, while Binance fulfilled a multibillion-dollar settlement in late 2023 to resolve multiple violations with U.S. regulators, including the Department of Justice and the Commodity Futures Trading Commission. An ongoing major issue is the civil case initiated by the Securities and Exchange Commission against Binance and Zhao. In February, both parties agreed to pause the proceedings for 60 days to explore a potential resolution, reflecting a broader withdrawal by the SEC from several prominent crypto lawsuits—indicating a possible regulatory reset under the new administration.
“We initially under-invested in compliance during our early days,” Teng acknowledged. “However, it’s crucial for a responsible organization to recognize those past errors, rectify them, and make significant investments in compliance, which we are actively pursuing.” Currently, Binance employs over 1,300 compliance professionals, which constitutes about a quarter of its total workforce, according to Teng. “Our trajectory is unmistakably focused on compliance,” he asserted.
Regulatory Scrutiny and Global Operations
Not all governments share this optimism. In Nigeria, one of Binance’s top compliance officers, Tigran Gambaryan, was recently imprisoned under harsh conditions. The charges against Binance in Nigeria include alleged non-payment of value-added tax and corporate income tax, failure to submit tax returns, and complicity in assisting clients in tax evasion through the platform. Gambaryan, a U.S. citizen and former IRS employee, was joined by executive Nadeem Anjarwalla, a British-Kenyan, who faced similar charges. Anjarwalla managed to escape custody in March 2024, while Gambaryan was released several months later. “The treatment he endured in Nigeria is unjust,” Teng expressed regarding Anjarwalla. “We’ve always aimed to collaborate and work constructively with governments worldwide.”
Since Teng assumed the CEO role, he has transformed the company from a founder-led startup into a board-governed organization. “Now, I report to a board of directors,” he explained, noting that the board consists of seven members, including three independent directors and an independent chairman. Despite the scrutiny faced by Binance, Teng maintains that the platform continues to lead the market. “We consistently hold more than 40% of the global market share,” he claimed, downplaying concerns about the rising influence of Coinbase and the momentum of crypto exchange-traded funds (ETFs). He believes that ETFs serve as a gateway to crypto trading. “Many users who begin trading through ETFs eventually transition to cryptocurrency platforms,” he noted, adding that unlike crypto, which trades continuously, ETFs are restricted to business hours.
Earlier this month, Binance secured its first institutional investment in a groundbreaking $2 billion deal with Emirati state-owned investment firm MGX, which focuses on AI and advanced technology and counts BlackRock and Microsoft among its partners. This investment marks the largest ever made in a crypto company and the first fully paid in stablecoins. Teng views this investment as a bridge between cryptocurrency and AI. “We are heavily utilizing AI,” he mentioned, explaining that Binance employs artificial intelligence for customer service, security, and compliance monitoring. “In the blockchain sector, leveraging technology for efficiency is essential.”
When asked about his major concerns, Teng listed several areas: security, compliance, product innovation, and opportunities for mergers and acquisitions. “Our goal is to maintain a robust, operational, best-in-class platform,” he concluded.
