Binance has appointed Kristen Hecht, the previous global head of corporate compliance at the exchange, as the newly appointed deputy chief compliance and global money laundering reporting officer. This newly created position aims to oversee compliance and anti-money laundering efforts as the company faces potential fraud allegations from U.S. regulatory authorities.
Despite recent reports of key legal and compliance executives departing from the exchange due to the pressures of handling numerous investigations into its operations, Binance refutes any connection between these departures and the ongoing situation.
Binance’s looking to mitigate financial crime
Kristen Hecht brings an impressive 17 years of experience in financial crime compliance to her new role. Previously, she was the Chief Compliance Officer for Meta’s pioneering crypto digital asset wallet project, Novi Financial. Before that, she held the Head of Financial Crime Compliance position at HSBC China and was a Senior Policy Advisor for the U.S. Department of the Treasury.
Noah Perlman, the Chief Compliance Officer of Binance, emphasized Hecht’s seasoned background and understanding of the importance of collaborating with governments and international organizations to combat financial crime effectively and sustainably.
As a Senior Policy Advisor, Hecht was crucial in supporting the U.S. government’s efforts to tackle terrorism and illicit financial activities. At HSBC China, she also successfully led efforts to foster a necessary culture change and establish an effective and sustainable compliance program.
In acknowledging the challenges of any emerging industry, Kristen Hecht has expressed her awareness of the significant threats posed by criminals looking to exploit global financial services, including those related to crypto digital assets. Leveraging her professional expertise, she said she is committed to continuously evolving Binance’s compliance controls to stay ahead of illicit actors.
As the Deputy Chief Compliance Officer at Binance, Hecht will collaborate closely with Perlman to strengthen the exchange’s compliance program. Simultaneously, as Global Money Laundering Reporting Officer (GMLRO), she will oversee the money laundering teams, ensuring they can effectively identify and mitigate financial crime.
Hecht’s strategic approach involves proactively engaging with regulators, intergovernmental organizations, and industry bodies to shape compliance programs proactively. In addition, her ultimate objective is to establish strong partnerships with regulators, industry bodies, and business partners to identify and address the risks associated with financial crime collectively. By doing so, she aims to fortify Binance’s stance against illicit activities and foster a safer and more secure financial ecosystem.
Binance is facing regulatory scrutiny from several bodies
Binance has made this move amid legal challenges, including lawsuits filed by the SEC and CFTC. On June 5, 2023, the SEC lodged 13 charges against the exchange, accusing the exchange of mishandling customers’ funds, providing false information to U.S. regulators, and that the exchange had unregistered securities.
In response to the SEC’s complaint, Binance expressed disappointment and disclosed its efforts to cooperate and negotiate for a settlement with the regulatory body. However, the SEC pursued litigation instead, abandoning the negotiation process. Additionally, Binance has been involved in a legal battle with the US Commodity Futures Trading Commission since March, where it allegedly violated US derivatives legislation.
Meanwhile, recent reports indicate that U.S. Department of Justice officials are looking into potential fraud charges against the exchange. However, they also weigh the option of imposing fines or adopting deferred or non-prosecution measures to prevent posing a threat to the entire cryptocurrency industry and avoid creating a bank run.