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Compliance brings absolute advantage! What new value does the new CEO Richard Teng bring to Binance?

2023/12/30

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At the end of November 2023, the leading global exchange Binance reached a settlement agreement with US regulatory authorities, as part of which the founder and then-CEO Changpeng Zhao (CZ) agreed to step down as CEO.

In his resignation statement, Zhao mentioned that after 6 years of accumulation and effort, Binance has developed a strong and excellent team capable of moving forward independently into the next stage. He also announced the appointment of Richard Teng, the current Global Head of Regional Markets, as the new CEO of Binance.

"Binance is no longer a baby. It's time to let it walk and run on its own. I know Binance will continue to grow and excel with its strong team support," Zhao wrote.

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Despite such significant news, the world's top exchange with nearly 50% market share, Binance, did not experience severe capital outflows or any run-on-the-bank phenomenon, and its exchange token $BNB's volatility was far below market expectations. This not only reflects the market's trust in Binance's long-standing reputation but also demonstrates users' affirmation and expectation of the new CEO.

As the industry moves towards 2024, how the new CEO Richard Teng, with 30 years of financial regulatory and compliance experience, will lead Binance and even the entire crypto industry into the next stage remains to be seen. Perhaps we can explore more about this through a series of public statements or interviews after he takes office.

How to interpret the U.S. regulation actions against Binance?

However, before discussing the next steps, we also need to objectively understand the motives behind the U.S. actions against Binance from a broader "market perspective" to contemplate the overall development of the market and industry.

In November of last year, after the closure of the former second-largest global U.S.-based exchange, FTX, the position of the U.S. in the cryptocurrency financial market was severely impacted. After a year of market recovery, both regulatory agencies and companies have been actively developing cryptocurrency-related businesses. Whether it is in securities and financial industries, large institutions, or individual investors, there has been great interest in the cryptocurrency market, with the most discussed and anticipated being the Bitcoin spot ETF.

The lawsuit by the U.S. Department of Justice against Binance coincidentally reached an agreement two months before the expiration date of the Bitcoin spot ETF. This implies that the Bitcoin spot ETF may become the preferred channel for traditional financial funds to enter the cryptocurrency assets in the future, enabling the U.S. government and institutions to better safeguard their transaction fees and tax revenue.

Some opinions suggest that this is a protective measure by the U.S. government to maintain market competitiveness for traditional financial institutions, with the largest industry player, Binance, naturally being the first target.

"Inevitable historical mistakes" helplessness under ambiguous regulations

Firstly, unlike other cryptocurrency companies that have had issues in the past.

The charges brought by U.S. regulatory agencies against Binance and Changpeng Zhao are only for Binance's historical mistakes during its early development in the U.S., where it did not comply with the registration and anti-money laundering requirements set by U.S. regulatory agencies. There are no accusations of Binance misappropriating any user funds or engaging in market manipulation. All user assets are protected as required, ensuring the security of user assets.

In fact, the U.S. does not have specific cryptocurrency laws, and it was only after the closure of FTX that enforcement actions were taken under existing legal frameworks, which faced protests from U.S.-based entities, including Coinbase, who believed that enforcement was replacing regulation and stifling innovation. This highlights the rapid changes in the cryptocurrency industry and the friction that arises from the slow pace of global regulatory development.

Richard Teng has stated, "Fines in the financial industry are not uncommon. If you search through past lists of fines for financial institutions, this figure is close to $90 billion. Regardless of whether Binance is a case, we may now be the most regulated exchange globally, focusing heavily on compliance."

Regarding Binance's operations, in the long term, according to the new CEO Richard Teng, he has shown an optimistic attitude.

Firstly, he will lead Binance's transformation from a tech startup to a more mature financial institution. Concrete implementation methods include establishing a global headquarters and setting up a board of directors. Additionally, according to the settlement agreement, there will be independent monitors in the future to supervise whether Binance complies with the agreement, meaning that Binance's compliance system will also be endorsed by the U.S. government. This is a positive development for users.

According to Binance's 2023 annual report: they have obtained compliance licenses and registrations in multiple countries and will invest $213 million in compliance in 2023.

30-year regulatory expert: Binance's new CEO Richard Teng poised to create a new era

Richard Teng holds a Master's degree in Applied Finance (with distinction) from the University of Western Australia and a Bachelor's degree in Accountancy (First Class) from Nanyang Technological University. Before joining Binance, he served for six years (March 2015 - March 2021) at the Abu Dhabi Global Market ADGM, the main international financial center in the capital of the UAE, where he served as the CEO of the Financial Services Regulatory Authority. He demonstrated his capabilities as one of the most innovative regulators globally. He has also served as the Head of Supervision at the Singapore Exchange (SGX) and as the Director of Corporate Finance at the Monetary Authority of Singapore (MAS). The MAS is one of the institutions in the world with the most comprehensive virtual asset regulatory framework.

In August 2021, Richard Teng officially joined Binance as the CEO of Binance Singapore. Shortly after, he began overseeing the Middle East and North Africa regions, the European region, and eventually all regional markets outside the U.S., ultimately becoming the head of regional markets at Binance. In this role, Richard Teng leads the regional team to ensure the stability of strategic partnerships, cultivate innovative ecosystems, and expand the cryptocurrency ecosystems within their respective regions. In November of this year, he took over as the new CEO of Binance.

Richard Teng strives to promote unified global rules

In an interview with Fortune, Richard Teng stated that one of his main goals is to help the cryptocurrency industry adopt unified global rules, similar to the rules that the banking industry has enjoyed for a long time. This will include resolving disputes about whether various types of digital assets should be classified as commodities or securities or reflect the unique blockchain technology supporting them.

"Regulators cannot effectively regulate an industry if they do not understand it. Just like bankers or banking regulators without bank accounts," said Richard Teng.

Richard Teng will leverage his experience in regulatory agencies and combine it with his understanding of the cryptocurrency industry over the years at Binance to actively promote compliance in the cryptocurrency industry.

This may be the most challenging and far-reaching challenge in the history of cryptocurrency adoption; if successful, Binance will usher in an unprecedented new era.

After assuming the role of Binance CEO, in his first blog post,he stated: "From an industry perspective, we must focus more on cooperating with policymakers, in order to contribute more effectively to the development of a globally harmonized regulatory framework, protect consumers, and embrace innovation."

Richard Teng: Regulation becoming clearer, I am more optimistic about cryptocurrencies

In December, during the Binance AMA, Richard Tengstated that clearer regulations will attract institutional investors to join, introducing new assets, liquidity, users, products, and even research. This is crucial for the widespread adoption of cryptocurrencies. "The adoption rate of cryptocurrencies in the next five years will be much higher than in the past five years, so I am very optimistic about the development of this field," he said.

Richard Teng's Web3 Future: Enhancing inclusive finance, reducing cross-border remittance costs

Richard Teng believes that by embracing innovation through decentralized applications (DApps), blockchain provides opportunities for empowerment to individuals and gives users more control over their data. To achieve this goal, there is a need to continue promoting the growth and application of Web3, actively building an ecosystem to provide an entry point that can change the world of financial technology, fulfilling the promises of blockchain: "enhancing opportunities for inclusive finance, cross-border remittances, and reducing transaction costs."

Regardless of how the entire cryptocurrency industry and exchanges will develop in the future, Binance will always be at the forefront. To achieve this ambitious vision of improving the internet and finance, it is necessary to promote innovative regulatory cooperation. With a new CEO who has 30 years of experience in financial regulation and compliance, able to transform detailed perspectives of the past regulatory environment, Richard Teng is undoubtedly the most suitable candidate and will lead Binance and the cryptocurrency industry into a new chapter of history. Just before the deadline, Richard Teng announced to the worldthat Binance has just surpassed 170 million global users.