Key Takeaways
- He Yi’s public letter provides insights into Binance’s stringent compliance measures like KYC, EDD, WCK, and POA.
- Binance is under investigation by the U.S. Department of Justice’s national security division as of May 6, 2023, adding to a series of SEC charges.
- Binance sells its Russian operations to CommEX, citing alignment with the company’s global compliance strategy.
In a crucial public letter that gains significance against the backdrop of global regulatory challenges, He Yi, Co-founder of Binance, outlined the company’s approach to compliance, competition, and internal efficiency. Yi explicitly mentioned the rigorous compliance measures like KYC, EDD, WCK, and POA that Binance follows. “It is important to note that many of our competitors do not need to consider KYC, compliance, EDD, WCK, POA as strictly as we do at Binance,” she stated.
Yi’s call for logical reasoning among employees seems to be a response to the multiple regulatory pressures the company is facing, particularly from the U.S. Department of Justice and the Securities and Exchange Commission (SEC).
On May 6, 2023, the U.S. Department of Justice’s national security division initiated an inquiry into Binance. This inquiry is focused on whether Binance allowed Russian customers to access its platform in violation of U.S. sanctions imposed in response to Russia’s invasion of Ukraine.
This investigation is not an isolated incident; it adds to a 2021 joint probe by the Department of Justice and the Internal Revenue Service, and an ongoing SEC investigation that filed 13 charges against Binance and its founder, Changpeng Zhao, on June 5, 2023.
Amidst these complexities, Binance recently announced that it would sell its entire Russian operations to CommEX. Noah Perlman, Binance’s Chief Compliance Officer, cited compliance strategy as the reason for this exit. “As we look toward the future, we recognize that operating in Russia is not compatible with Binance’s compliance strategy,” Perlman mentioned. This strategic move is expected to take up to a year to fully transition existing Russian users to CommEX.
He Yi’s letter provides a lens to understand Binance’s strategic moves in navigating its global regulatory challenges. Her emphasis on strict compliance measures and logical decision-making among employees appears to be a part of a larger strategy to bolster the company’s standing amidst ongoing investigations and market exits.
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