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- Binance, the world's biggest crypto exchange, expects to pay a fine to settle an investigation into its compliance practices.
- Crypto firm Kraken stumped up $30 million this week to settle with a different regulator, the SEC.
- It's still a "very confusing time" for Binance to understand how U.S. regulators want to oversee the crypto market, its CSO said.
Binance expects to pay a fine to settle an investigation by law enforcement and regulators, a report says, as one of its executives decried a "very confusing time" for the industry.
In an interview with the Wall Street Journal, Binance's chief strategy officer Patrick Hillman said the world's biggest cryptocurrency exchange had been working on compliance measures to address regulators' concerns, but still expected to pay a monetary settlement.
Binance has been under investigation from the Department of Justice (DOJ) for potential violations of anti-money laundering laws, the Journal reported, citing people familiar with the matter. The Commodity Futures Trading Commission (CFTC) has been looking into whether the exchange had offered derivatives to US customers without registering the activity with the CFTC.
Hillman explained that the crypto exchange grew quickly under a group of software engineers who were inexperienced with laws and written rules to address things like bribery and corruption, money laundering, and economic sanctions, creating what he described as gaps in compliance.
The outcome of Binance's conversations with the investigators was "likely a fine, could be more.…We just don't know. That is for regulators to decide," he told the Journal.
"It will be a good moment for our company because it allows us to put it behind us," Hillman told the newspaper.
This is the latest crackdown on a crypto firm in a campaign that has been led primarily by the Securities and Exchange Commission (SEC). The regulator agreed a $30 million settlement with Kraken last week over the crypto exchange's so-called "staking" program.
Hillman told the Journal that the crackdown meant it was a "very confusing time for us" while Binance tried to understand how regulators plan to oversee the crypto industry.
This week, the WSJ reported that the SEC planned to sue Paxos over its Binance-branded stablecoin, with New York regulators subsequently ordering the firm to stop minting the coin.
Binance's CSO told the Journal the Paxos case in particular "would have a really deep and long-lasting chilling effect in the United States."
Binance, the DOJ, and the CFTC didn't immediately respond to Insider's requests for comment.