Cryptocurrency exchange Binance.US has hired Lesley O’Neill as its new chief compliance officer, the company announced last week. The appointment comes as it continues to face the fallout of lawsuits and investigations over allegations of violating securities laws and anti-money laundering regulations.
O’Neill joins Binance.US from blockchain startup Prove, where she previously served as chief compliance officer. She has also held legal and compliance roles at EY, Milbank and Bloomberg.
In Binance.US’s announcement, O’Neill said: “I look forward to earning and maintaining the trust of our customers and regulators by building upon the company’s strong foundation of compliance and deepening its commitment to accountability and transparency.”
Her role will involve leading Binance.US’s know-your-customer, anti-money laundering, and sanctions compliance programs. The same areas that put Binance in the crosshairs of the DOJ last year. They are also key areas of scrutiny for regulators concerned about illicit financial flows in the cryptocurrency industry.
Binance.US was launched in 2019 as the US-based arm of Binance, the world’s largest cryptocurrency exchange. The American branch is a distinct legal entity, structured to comply with local regulations. However, both have been mired in legal troubles over the past year, including criminal charges against founder Changpeng Zhao.
In June 2022, the Securities and Exchange Commission (SEC) sued Binance.US for allegedly operating an unregistered exchange and broker-dealer, as well as selling digital tokens that should have been registered as securities. The SEC complaint also accused Binance and Zhao of maintaining control over Binance US behind the scenes while publicly claiming it was an independent entity.
Then, to make things worse, last November, the US Department of Justice announced a settlement with Binance over criminal charges related to money laundering and sanctions violations. As part of the deal, Zhao stepped down as CEO. He also pled guilty to failing to maintain an effective anti-money laundering program at Binance.
US Treasury Secretary Janet Yellen said: “Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform.”
The new CEO, Richard Teng, has said he wants to turn over a new leaf, and for the company to become fully compliant with US law. However, Teng has continued the shadowy ways of his predecessor, refusing to disclose the company’s global headquarters.
When Zhao resigned as Binance CEO, he also left the role of chairman of Binance.US’ board of directors. His sentencing hearing is scheduled for February 2024, when he could be jailed.
Meanwhile, the SEC case against Binance US continues working its way through the courts. When filing charges last summer, SEC Director of Enforcement Gurbir Grewal accused the company of “a web of deception” and “calculated evasion of the law.”
One thing is for sure, O’Neill’s in-tray will be anything but empty as the strives to avoid a repeat of 2023.