Richard Teng, the new CEO of Binance, will have to deal with many challenges that the world's largest cryptocurrency exchange has faced recently, such as rising compliance costs, legal issues, and shrinking market share.
Teng, who previously served as Binance's Head of Regional Markets, took the helm of the exchange after its founder Changpeng Zhao pleaded guilty to violating U.S. anti-money laundering laws as part of a $4.3 billion deal to settle a multi-year U.S. investigation, Reuters reported.
Many speculate that the new CEO will have to completely overhaul Binance's policies, especially after U.S. Treasury Secretary Janet Yellen said the exchange "turned a blind eye to its legal obligations in pursuit of profits" by executing transactions that may have been linked to terrorist organizations and cybercriminals.
Teng, who worked for a financial regulator before joining Binance, said he will focus on three key points in the initial phase of his leadership:
- Assuring users that they can have confidence in the company's financial strength, safety, and security.
- Working with regulators around the world to maintain high standards that encourage innovation while providing important consumer protections.
- Working with partners to drive growth and adoption of Web3.
"Teng is perceived as trustworthy," said Carol Alexander, a finance professor at the University of Sussex. However, she emphasized that Binance has a difficult task ahead of it in rebuilding its policies and restoring trust, especially since investors withdrew more than $1 billion from the exchange within 24 hours of Changpeng Zhao's departure.
It's worth noting that while the agreement between the U.S. Department of Justice and Binance prohibits Zhao from future involvement in the management of the exchange, he remains a major shareholder, and Yi He, the mother of Zhao's children, is a co-founder of the company and remains its top executive.
Simon Matthews, Binance's PR Director, said Binance did not have the proper controls in place for the company it was quickly becoming and often made poor decisions due to its rapid growth.
"Richard was hired two years ago to help Binance mature and overcome these historical issues," Matthews said.
"Recently, the company has been working hard to rebuild its organizational structure and staff and modernize its systems," he added.
Mathews emphasized that Binance now has new leadership with experience in regulatory compliance and large corporations, pointing to the exchange's future growth prospects.
Meanwhile, Binance is rapidly losing market share. According to the latest CCData data, the exchange controlled just 32% of spot cryptocurrency trading and 50% of derivatives trading last month, down from 55% and 62%, respectively, in January. Many analysts attribute this decline primarily to the discontinuation of its promotion of zero-fee trades as well as regulatory concerns.
Although the exchange has said it has increased compliance costs, investors noted that Binance is able to absorb both the additional compliance costs and the fines in the U.S.
"The fundamentals of our business are very strong," Teng wrote on his X (Twitter) page.
Loading...
"Our capital structure has no debt, expenses are modest, and despite the low fees we charge our users, we have good revenues and profits," he added.
Recall that prior to joining Binance, Richard Teng served as CEO of the Abu Dhabi Global Financial Services Regulatory Authority and was also the head of the Singapore exchange's division that develops rules for listing, trading, and clearing activities.
See also: Bitvavo enters the cryptocurrency market in France.
