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Compliance Officers Say Crypto Industry Can Learn From Exchanges’ Settlements

The cryptocurrency industry can learn lessons from the settlements three crypto exchanges reached with regulators.

So said the chief compliance officers of Binance, Coinbase and Kraken while speaking Wednesday (April 10) at Chainalysis’ Links conference in New York, the Wall Street Journal (WSJ) reported Wednesday.

Each of the three companies reached settlements with U.S. regulators within the past two years, continues to invest in compliance controls and staffing, and hopes the rest of the industry can learn from their experiences, according to the report.

Binance’s chief compliance officer, Noah Perlman, said the requirements that came with its settlement guide the company as it improves its compliance program and can also serve as a model for others in the industry, per the report.

In November, Binance settled claims from multiple agencies that it violated anti-money laundering (AML) laws and sanctions, the report said.

Coinbase’s global head of financial crime compliance, Valerie-Leila Jaber, said Coinbase’s compliance team has partnered with the company’s technology teams to enhance its ability to respond quickly to compliance-related alerts at a time when its transaction volume is increasing, according to the report.

In January, Coinbase agreed to a settlement with the New York State Department of Financial Services over violations of AML laws, the report said.

Kraken’s chief compliance officer, CJ Rinaldi, said the company has learned that it’s best to identify problems and notify regulators directly, thereby avoiding surprises, per the report.

In 2022, Kraken settled allegations that it violated U.S. sanctions against Iran, the report said.

The WSJ report comes a day after Binance’s new CEO, Richard Teng, told CNBC that the crypto exchange is a more mature company now and has moved past its earlier ethos that it’s “better to ask for forgiveness than permission.”

“As the company moves into greater maturity, we are looking at sustainability,” Teng said. “The direction of travel now is very clear toward much more compliance, which is why we’re building up a very robust compliance program.”

The ability to easily conduct transaction monitoring has helped crypto shake off much of its early reputation as nothing but a currency for darknet markets and illicit actors, Caitlin Barnett, director of regulation and compliance at blockchain data firm Chainalysis, told PYMNTS in an interview posted in November 2022.