• Tue. Apr 23rd, 2024

Despite its Legal Situation, Binance Grows by 30% in 2023 

Walter Swift

ByWalter Swift

Dec 30, 2023

Binance’s end-of-year report published on December 28 unveiled an impressive management of assets exceeding $1.2 billion, dedicated to serving a vast user base of over 170 million individuals.

 As the foremost crypto exchange with the highest daily trading volume and user registrations, Binance persistently constructs pivotal infrastructures and develops cutting-edge products essential for catalyzing the adoption of Web 3 and related technologies. Despite Chngpeng Zhao’s abrupt exit as CEO, Binance has showcased unwavering fortitude, reaffirming its commitment to advancing the mainstream embrace of Bitcoin and digital assets.

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Moreover, Binance’s crypto exchange effectively oversees a substantial reserve, totaling over half a million Bitcoins, while meticulously adhering to regulatory standards across diverse global jurisdictions. The newly appointed CEO, Richard Teng, has unequivocally pledged to uphold the legacy of safeguarding crypto users, concurrently prioritizing rigorous compliance with regulatory protocols.

Binance’s 2023 Performance Report: A Deep Dive

The report highlights a notable addition of 40 million new users throughout the year, marking a substantial 30% surge from the previous year’s count. Consequently, the Binance crypto exchange presently hosts a user base exceeding 170 million individuals, all validated through the Know Your Customer (KYC) procedure.

With 431 digital assets available for trade on the platform, Binance boasts an impressive 1,785 liquid trading pairs. Furthermore, the exchange now supports a staggering 112 fiat currencies, facilitating seamless on and off-ramping services in collaboration with its partners. Notably, in 2023, the completed Binance P2P trades surged 18% compared to the prior year, coinciding with a substantial 39% increase in P2P users, reflecting continuous growth despite ongoing legal and regulatory challenges.

Acknowledging the dynamic shifts in the crypto regulatory landscape, Binance disclosed an expenditure of approximately $213 million in 2023 for compliance efforts, a substantial 35% year-on-year increase from the $158 million spent in 2022. Concurrently, the cryptocurrency exchange has diligently pursued operational licenses in various jurisdictions and remains actively engaged with regulators to secure necessary operating approvals.

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To foster the seamless integration of digital assets and decentralized financial (DeFi) protocols, Binance introduced its Web3 wallet on November 8, 2023 (in Istanbul, Turkey), allowing users to manage their assets more efficiently. Impressively, within the inaugural week of its launch, the Binance Web3 wallet garnered millions of users, signifying a rapid adoption rate.

Moreover, Binance emphasized its amplified endeavors in educating users about the cryptocurrency market and the burgeoning web3 industry. Additionally, the cryptocurrency exchange highlighted the expansion of its security team to a robust count of 70 members, catering to and processing a significant 58,000 requests from diverse law enforcement entities throughout 2023.

Binance Strives for a Positive Outlook Amid Challenges

The report concludes a tumultuous year for Binance, marked by a string of legal battles. In early December, the U.S. District Court for the Northern District of Illinois directed Binance and Zhao to collectively pay fines totaling $2.7 billion to the U.S. Commodities and Futures Trading Commission for violating the Commodity Exchange Act (CEA) and CFTC regulations.

The settlement moves come on the heels of a settlement in November, where Binance settled a U.S. Department of Justice criminal investigation by agreeing to a $4.3 billion fine, leading to Zhao’s decision to step down as CEO. However, the unresolved legal tussle between Binance and the U.S. Securities and Exchange Commission (SEC) lingers.

Since the settlement events, which include a guilty plea by both Zhao and the company, Richard Teng noted substantial positive cash flows and a consistent influx of new users to the platform.

Zhao faces a potential sentencing in February, potentially receiving an 18-month prison term, although the Justice Department could push for a more severe custodial sentence. In a recent development, a federal judge mandated that Zhao remain in the U.S., citing concerns about his wealth and residency in the United Arab Emirates, which could pose a flight risk.

Despite fluctuations in his wealth throughout 2023, Zhao remains a billionaire. Reports indicate Zhao, who retains a controlling stake in Binance, saw his net worth climb from $12 billion to $37 billion, a significant drop from the previous year’s $97 billion.

Meanwhile, Binance disclosed plans to allocate $213 million for compliance in 2023, a 35% increase from its 2022 spending. Binance executives expect the amount to rise further following an agreement with the U.S. government to finance a government-approved compliance monitor for five years.

Seeking to portray a positive outlook amid its legal adversities and the ex-CEO’s challenges, Binance stated, “This year, our organization took responsibility for historical issues and has evolved through a leadership change, emerging even stronger.” The company outlined governance reforms, including establishing a board comprising a minimum of three independent directors, responsible and accountable to all stakeholders, to oversee and govern the organization.

Finally, Binance underscored that the American regulatory agencies did not accuse them of misappropriating user funds or engaging in market manipulation.

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Walter Swift

Walter Swift

Walter Swift is an adept crypto writer, known for his deep insights into the decentralized world. His pieces artfully break down complex blockchain topics, making them accessible to a broad audience. With a passion for emerging technologies, Walter's articles are a beacon for crypto enthusiasts and novices alike.

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