According to the new CEO, Binance can no longer behave like a technology startup and must evolve into a conventional financial company.
Binance’s new CEO, Richard Teng, admitted that the exchange made “missteps,” but highlights that it is at an important point in its evolution from a “tech startup” to a “traditional financial company.”
Teng took office less than a week ago, following the revelation of a deal between Binance and the US Department of Justice (DoJ). One of the conditions imposed was the resignation of the then CEO, Changpeng Zhao, who also pleaded guilty to money laundering crimes.
New CEO Defends Binance
According to the new CEO, Binance can no longer behave like a technology startup and must evolve into a conventional financial company. Teng took office with the mission of saving the company from the crisis generated by CZ’s departure. One of the fears of investors is that the DoJ action will result in a new FTX.
The comparison to Sam Bankman-Fried’s exchange is valid: when negative reviews, including those from CZ himself, began to pile up, the company’s clients staged a run on the bank that depleted all of its liquidity and revealed that it had used money of clients.
Not surprisingly, the rumors about CZ leaving were enough for a similar process to occur on Binance. The difference is that the exchange had enough volume to survive the withdrawals.
This issue, in fact, was reinforced not only by Teng but also by CZ himself in his farewell message on Twitter (X). Both emphasized that no accusation against Binance includes the use of customer funds.
It’s difficult to know whether Binance internally considers the outflow of funds to be high or low. Anyway, the flow of withdrawals calmed down and – who knew! – Custody of some tokens on the exchange has increased rather than decreased.
New Binance CEO Admits Trust in Former CEO
Whether or not he successfully completed the first mission, the fact is that Richard Teng’s rise to the top position in the company did not happen overnight. Negotiations with the Department of Justice began months before its publication, and indeed Teng’s selection for the position was considered at the same time.
In any case, the new CEO guarantees that he has the full trust of his predecessor, who, despite not having a position on the stock market, remains a shareholder:
“I want to emphasize that I have CZ’s trust, the leadership team and our members to lead this important franchise into the future. And this trust is very important. I think it transcends responsibility to our 150 million users [customers].”
Speaking of CZ, the Binance co-founder has always had exotic views for a corporate leader. One of his ideas was that the exchange did not need a headquarters, since most of its work is done remotely. He only relented on this point because he was forced by the legislation of many markets that Binance wanted to enter.
Teng, on the other hand, believes the exchange needs a more traditional corporate structure. This modification will include a board of directors, management and, most importantly, transparency. Teng added the following:
“Once we have this corporate structure in place, we can start sharing financial information. We know that audits require them and regulatory agencies will require them too. That is why we are committed to transparency as an organization.”
By Audy Castaneda
