Binance appoints its first board of directors amid regulatory reforms

Cryptocurrency exchange Binance has established its first board of directors. This development follows the company's guilty plea to US charges, including anti-money laundering and sanctions violations.

Gabriel Abed, who previously served as Barbados' ambassador to the UAE, has been appointed chairman of the new seven-member board.

Binance board lacks external oversight: criticism

The composition of the Board reflects a combination of internal leadership and external expertise. In addition to Abed, Binance CEO Richard Teng and longtime executives Hina Chen, Jinkai He and Leilai Wang joined the board.

External members Arno Ventura and Chen Wang enrich the board with their diverse perspectives. These appointments took effect March 7.

Under Teng's leadership, which started in November, Binance is undergoing major changes. After the agreement with the American authorities, the stock market is moving towards a more traditional institutional framework. This also includes the creation of a formal board of directors and possibly the creation of a permanent headquarters.

Read more: Binance Review 2023: Is It the Right Cryptocurrency Exchange for You?

The $4.3 billion settlement, one of the largest in U.S. legal history, highlights strict regulatory scrutiny of cryptocurrency exchanges.

Given the board's internal dominance, the move was met with mixed reactions. Experts like Austin Campbell, a consultant to blockchain companies, have expressed concerns about limited external board oversight and the need for more experienced financial compliance professionals.

And he said Campbell: “The fact that Binance has a board of directors comprised primarily of company insiders shows me that they are still resistant to external oversight and oversight, and the lack of depth on the board of directors board composed of independent members with deep expertise in regulated financial risks or compliance is not ideal. » .

Additionally, Binance's legal troubles are far from over, as the company's founder, Changpeng Zhao, awaits sentencing in April. Zhao's potential 18-month prison sentence indicates the serious repercussions of failing to meet regulatory standards.

Internationally, Binance's regulatory challenges are growing. For example, Nigeria recently accused the stock exchange of tax evasion. This case highlights global enforcement challenges, underscoring the importance of regulatory compliance for cryptocurrency entities.

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However, the ultimate impact of these governance reforms on Binance's operational integrity is not yet clear.