Crypto exchange Binance has established its inaugural board of directors. This development is a response to the company’s plea of guilt to the US charges, including anti-money laundering and sanctions violations.
Gabriel Abed, previously the ambassador of Barbados to the United Arab Emirates, has been named chairman of this new seven-member board.
Binance’s Board of Directors Lacks External Oversight: Critics
The board’s composition reflects a blend of internal leadership and external expertise. Alongside Abed, Binance CEO Richard Teng, and long-standing executives Heina Chen, Jinkai He, and Lilai Wang, have joined the board.
External members Arnaud Ventura and Xin Wang enrich the board with their diverse perspectives. These appointments have been effective from March 7.
Under Teng’s leadership, initiated in November, Binance is undergoing significant changes. After settling with the US authorities, the exchange is shifting towards a more conventional corporate framework. This includes the establishment of a formal board and potentially setting up a definitive headquarters.
Read more: Binance Review 2023: Is It the Right Crypto Exchange for You?
The $4.3 billion settlement, which is one of the largest in the US legal history, accentuates the crypto exchanges’ rigorous regulatory scrutiny.
Due to the board’s insider dominance, the move has been met with mixed reactions. Experts like Austin Campbell, a consultant for blockchain firms, have voiced concerns regarding the board’s limited external oversight and the need for more seasoned financial compliance professionals.
“Binance having a board composed primarily of company insiders tells me they are still resistant to outside control and oversight, and the lack of depth on the board of independent members with deep regulated financial risk or compliance experience is not ideal,” Campbell said.
Furthermore, the legal woes for Binance are far from over, as founder Changpeng Zhao awaits sentencing in April. Zhao’s potential 18-month prison term signifies the severe repercussions of failing to adhere to regulatory standards.
Internationally, Binance’s regulatory challenges are escalating. For instance, Nigeria recently accused the exchange of tax evasion. This case underlines the global enforcement challenges, stressing the importance of regulatory compliance for cryptocurrency entities.
Read more: Crypto Regulation: What Are the Benefits and Drawbacks?
However, the ultimate impact of these governance reforms on Binance’s operational integrity remains to be seen.
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