Crypto exchange giant Binance reached a landmark deal this week with two U.S. regulators - FinCEN and OFAC - to resolve regulatory violations around anti-money laundering and sanctions compliance. As part of the settlement, Binance will pay fines totaling over $1 billion while submitting to third-party monitoring of its controls.
Most notably, the agreement requires Binance to cease operations in the U.S. and ban American customers from its main international exchange. This ends Binance's gray-area approach to serving U.S. users through its global site. The company will refocus efforts on its fully regulated U.S. subsidiary Binance.US.
Tuesday's news caps years of playing regulatory cat-and-mouse for the world's largest crypto exchange. Though founded abroad, Binance's dominance of the U.S. market necessitated some compromise with American authorities. The joint settlement brings Binance firmly into the U.S. regulatory perimeter.
While costly, closing the regulatory chapter allows Binance executives to return focus to global expansion under compliant local subsidiaries. With its checkered past now largely addressed, Binance wants to foster an image as the industry's standard-bearer for security and transparency. Whether investors view it as such remains to be seen. But diminished regulatory uncertainty provides a tailwind.
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