At the end of November 2023, leading global exchange Binance reached a settlement agreement with US regulators. As part of the agreement, the founder and current CEO, Changpeng Zhao (CZ), agreed to step down as CEO.
In his resignation statement, CZ mentioned that after 6 years of accumulation and effort, Binance has cultivated a strong and excellent team capable of moving forward independently. 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 is time for it to walk and run on its own. I know Binance will continue to grow and excel with the support of its strong team,” wrote CZ.
Despite such significant news, the exchange did not experience a significant capital outflow or any runs on its funds, and the volatility of its native token, BNB, remained lower than expected. This not only reflects the market’s trust in Binance’s accumulated reputation but also demonstrates users’ affirmation and expectations of the new CEO.
As the industry moves towards 2024, how will the new CEO, Richard Teng, with his 30 years of financial regulatory and compliance experience, lead Binance and even the entire cryptocurrency industry into the next phase? Perhaps we can explore further through his series of public statements or interviews after taking office.
How to interpret the US regulation against Binance?
However, before discussing the next steps, we also need to objectively understand the underlying motives behind the US’s actions against Binance from a market perspective and think about the overall development of the market and industry.
In November of last year, the collapse of FTX, the former second-largest US-based exchange, dealt a heavy blow to the US cryptocurrency market’s position. After a year of market recovery, both regulatory agencies and companies have been actively developing cryptocurrency-related businesses. Whether it is the securities and financial industry, large institutions, or individual investors, they have shown great interest in the cryptocurrency market, with the Bitcoin spot ETF being the most discussed and anticipated.
The lawsuit filed by the US Department of Justice against Binance coincidentally reached a settlement two months before the deadline for the approval of the Bitcoin spot ETF. This means that the Bitcoin spot ETF may become the preferred channel for traditional financial capital to enter the cryptocurrency assets, and the US government and institutions will be able to protect their transaction fees and tax revenues more effectively.
Some argue that this is a protective measure taken by the US government to maintain the market competitiveness of traditional financial institutions, and Binance, as the largest player, naturally bears the brunt.
“The inevitable historical mistakes” helplessness under ambiguous regulation
First of all, it is different from other troubled cryptocurrency companies in the past. The accusations made by US regulators against Binance and Changpeng Zhao only pertain to the early development of Binance in the US and its failure to meet the regulatory requirements at that time, such as unregistered licenses or the implementation of anti-money laundering requirements. There is no accusation of Binance misappropriating user funds or engaging in market manipulation. All user assets are adequately protected, ensuring the security of user funds.
In fact, there is no specific cryptocurrency regulation in the US, and it was only after the collapse of FTX that strong enforcement was initiated using existing legal frameworks, which led to protests from US-based companies like Coinbase, who believed that law enforcement was substituting for regulation and suppressing innovation. This highlights the rapid changes in the cryptocurrency industry and the friction that arises from the slow development of global regulations.
Richard Teng once stated, “Fines are not uncommon in the financial industry. If you search for the fine lists of financial institutions, the number is close to $90 billion. Whether Binance is a case or not, we are probably the most regulated exchange globally now, and we pay a lot of attention to compliance.”
For Binance’s operations, in the long run, according to the new CEO Richard Teng, he holds an optimistic attitude. Firstly, he will lead Binance’s transformation from a technology startup to a more mature financial institution. Concrete measures include establishing a global headquarters and a board of directors. Additionally, according to the settlement agreement, there will be independent monitors in the future to oversee Binance’s compliance with the agreement. This means that Binance’s compliance system also receives the endorsement of the US government. For users, this is a positive development.
According to Binance’s 2023 Annual Report, it has obtained compliance licenses and registrations in multiple countries and invested $213 million in compliance in 2023.
30-year regulatory expert: Richard Teng, the new CEO of Binance, is expected to open a new chapter
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. Prior to joining Binance, he served for 6 years (March 2015 – March 2021) as the CEO of the Financial Services Regulatory Authority at the Abu Dhabi Global Market (ADGM), the main international financial center in the capital of the United Arab Emirates. There, he demonstrated his abilities as one of the most innovative regulators globally. He has also served as the Chief Regulatory Officer at the Singapore Exchange (SGX) and the Director of Corporate Finance at the Monetary Authority of Singapore (MAS). The MAS is one of the institutions worldwide with the most comprehensive virtual asset regulatory frameworks.
In August 2021, Richard Teng officially joined Binance as the CEO of Binance Singapore. Shortly after, he took charge of the Middle East and North Africa region, the European region, and eventually became the Global Head of Regional Markets at Binance, responsible for all regional markets outside the United States. In this role, Richard Teng led regional teams to ensure robust strategic partnerships, foster innovative ecosystems, and expand cryptocurrency ecosystems within their respective regions. In November of this year, he took over as the new CEO of Binance.
Richard Teng is committed to promoting unified global rules
In an interview with Fortune, Richard Teng stated that one of his main goals is to help the cryptocurrency industry promote the adoption of unified global rules, similar to the rules that the banking industry has enjoyed for a long time. This will include resolving debates about whether various types of digital assets should be classified as commodities, securities, or other classifications that 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 bodies and combine it with his understanding of the cryptocurrency industry from his 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 enter an unprecedented new era.
After assuming the position of CEO of Binance, Richard Teng stated in his first blog post, “In terms of the industry, we must focus more on collaborating with policymakers. Only in this way can we contribute more effectively to the development of a globally unified regulatory framework, protect consumers, and embrace innovation.”
Richard Teng: Regulatory clarity makes me more optimistic about cryptocurrencies
In the Binance AMA in December, Richard Teng stated that regulatory clarity will attract institutional investors who will bring 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.”
Richard Teng’s vision for the future of Web3: Enhancing inclusive finance and reducing cross-border remittance costs
Richard Teng believes that embracing innovation through decentralized applications (DApps) empowers individuals and gives users more control over their personal data. To achieve this goal, continuous promotion of the growth and application of Web3 and the construction of an ecosystem that provides an entry point to change the world of financial technology is necessary. This will fulfill the promises of blockchain in enhancing inclusive financial opportunities, reducing cross-border remittance costs, and improving transaction costs.
Regardless of how the cryptocurrency industry and exchanges will develop in the future, Binance will always be at the forefront. To achieve this grand vision of improving the internet and finance, it is necessary to promote collaborative innovation in regulation. The new CEO, with 30 years of financial regulatory and compliance experience, is undoubtedly the best candidate to transform the detailed view of the regulatory environment into action. Richard Teng will lead Binance and the cryptocurrency industry into a new historic chapter. Just before the deadline, Richard Teng announced to the world that Binance has just surpassed 170 million global users.
Binance
Richard Teng
CEO