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Binance Reports 30% User Growth Amid Regulatory Troubles

Binance

Binance’s ongoing legal and regulatory troubles apparently haven’t hurt its growth.

The world’s largest cryptocurrency exchange saw its user base grow by 30% during 2023 with the addition of 40 million customers, the company’s new CEO said in a year-end report Thursday (Dec. 28).

“Importantly, we saw a particularly strong uptick in inflows coming from institutional investors,” Richard Teng said in the report.

“The reason I see this as fantastic news is that it suggests institutions’ trust in Binance and the larger Web3 ecosystem growing stronger at a time when institutional participation, along with clear regulation, is key to the mass adoption of digital assets.”

The report comes at the end of a year that saw Binance sued by the Securities and Exchange Commission (SEC), and settle a case with the U.S. Department of Justice that ended with a $4.3 billion settlement and the departure of former CEO and founder Changpeng Zhao.

Since that settlement — which also included a criminal guilty plea by both Zhao and the company — “net inflows have been very robust, while new users continued coming in steadily,” said Teng.

Meanwhile, Binance said it will spend $213 million on compliance in 2023, up 35% from what it spent in 2022. Look for that number to increase even more next year, as the company’s settlement with the U.S. government includes an agreement to fund a government approved compliance monitor for five years.

Zhao is due to be sentenced in February, and could receive up to 18 months in prison, though the Justice Department could argue for a more severe custodial term.

Last month, a federal judge ordered Zhao to remain in the U.S. after prosecutors alleged his fortune and residency in the United Arab Emirates makes him a flight risk.

That fortune fluctuated throughout 2023, although Zhao remains a multibillionaire. According to a recent report, Zhao — who still has a controlling stake in Binance — saw his net worth grow by $25 billion to $37 billion during 2023, though that number is down from $97 billion last year.