Binance faces unprecedented compliance regulatory pressure from U.S. regulators

According to John Reed Stark, former head of the Internet Enforcement Office at the US Securities and Exchange Commission (SEC), Binance has made a series of unprecedented compliance commitments in its plea agreement with the US Department of Justice (DOJ) and the Financial Crimes Enforcement Network (FinCEN). These commitments include establishing new procedures for handling policies, procedures and internal controls, customer and third-party relationships, anti-evasion controls, regular reviews, appropriate supervision and independence, training and guidance, comprehensive reporting and investigation, enforcement and discipline, and monitoring, testing and auditing.

Binance's new compliance commitments are seen as an ideal checklist for consulting firms, and their implementation and enforcement are expected to cost tens of millions or even billions of dollars. In addition, the scope of the DOJ compliance monitor's responsibilities is broad and comprehensive, with the document outlining Binance's obligations alone spanning 13 pages. Binance's compliance monitoring will be overseen by the DOJ's Criminal Division, Money Laundering and Asset Recovery Section, National Security Division, Counterintelligence and Export Control Section, and the US Attorney's Office for the Western District of Washington.

Furthermore, Binance must facilitate the monitor's access to the company, providing all reasonable requests for information, documents, records, facilities and employees. In some cases, the monitor may even choose not to report its findings to Binance. Specifically, when potential misconduct involves national security, public health or safety, environmental risks, senior management, obstruction of justice, or other significant risks, the monitor must report directly to the government rather than to Binance.