- Binance.US has hired a second major regulator, Manny Alvarez, to join the cryptocurrency exchange July 22 as its chief administrative officer, the company said Tuesday in a blog post.
- In the role, Alvarez — who served until last month as commissioner of California’s Department of Financial Protection and Innovation — will oversee risk, compliance and Binance.US’s legal function, the company said Tuesday. Alvarez will report to Binance.US CEO Brian Brooks, who served as the Office of the Comptroller of the Currency’s acting chief from May 2020 until January and joined the exchange May 1.
- "Compliance is the key to creating trust with both our customers and our regulators, which is why we are hiring recognized leaders in the field such as Manny," Brooks said in Tuesday's post. "He is that rare brilliant regulatory mind with a strong sense of law and compliance who also brings a strong technology and Silicon Valley perspective."
Alvarez led California’s top financial regulator at a time of transition. The state last year created a Department of Financial Protection and Innovation (DFPI) from its existing Department of Business Oversight; expanded the regulator’s purview to include fintechs, payday lenders and debt collectors; and allowed it to bring both administrative and civil actions.
Before joining the then-Department of Business Oversight in 2019, Alvarez served as general counsel and chief compliance officer at the fintech Affirm and, previously, was an enforcement attorney at the Consumer Financial Protection Bureau (CFPB).
Upon announcing he was leaving his California post, effective June 18, Alvarez told American Banker, "When I consider the world reopening, now may be a good time to hit pause and enjoy some time." He said he had accomplished what he set out to do at the DFPI despite that it had launched just months ago.
Binance.US, meanwhile, has added 110 employees to its regulatory, legal, compliance and customer support teams — nearly doubling its headcount — since Brooks joined, the company said. Brooks has taken pains to delineate Binance.US from the world’s largest crypto exchange, which he says just shares a common founder.
That founder, Changpeng Zhao, posted a letter Tuesday to Binance’s blog, expressing that the exchange hasn't "always got everything exactly right, but we are learning and improving every day."
"We hope to clarify and reiterate our commitment to partner with regulators," Zhao wrote, adding the company is "hiring more talent" and "putting in place more systems and processes to protect our users."
"Compliance is a journey — especially in new sectors like crypto," Zhao wrote. "We know that we are at the tipping point, along with the broader industry."
The letter comes as the exchange sorts out regulatory issues in a number of countries. The U.K.’s Financial Conduct Authority (FCA) ordered the exchange to stop all regulated activities in the country. U.K. customers, however, can still use the exchange’s non-U.K. operations for activities the FCA doesn’t directly regulate, such as buying and selling cryptocurrency holdings. But Barclays, for one, stopped its U.K.-based customers from using credit and debit cards to make payments to Binance. (Update: Santander told U.K. customers that, starting Thursday, it would stop payments from their accounts to Binance but would continue to let them withdraw cash from the exchange, the Financial Times reported.)
The exchange told European customers in an email that, as of Wednesday, they would temporarily be unable to deposit funds through the Single Euro Payments Area because of "events beyond our control," according to the Financial Times.
Thailand’s Securities and Exchange Commission filed a criminal complaint last week, alleging Binance was operating in the country without authorization.
On the U.K. front, a source told CoinDesk that Binance wants to hire "a U.K. version of Brian Brooks" — in other words, a former regulator or government official to bolster the exchange’s credibility in its commitment to compliance. The exchange announced Wednesday it had hired former eToro executive Jonathan Farnell as director of compliance on its European team. Farnell started in May, according to his LinkedIn profile.
Brooks, meanwhile, has said he plans to hire hundreds of people in the next six to nine months, and that Binance.US could go public within the next four years, according to Bloomberg.
"Bringing on someone like Manny, who was the regulator responsible for the protection of over 40 million consumers, shows … we’re not going to be defensive about compliance and consumer protection," Brooks told the wire service. "We’re going to be on the front foot, so we will hire the very best talent, the very most-senior people to run those functions for us because we agree they’re super important."
Alvarez, for one, said he was joining the company at a "momentous point in [its] growth trajectory."
"Throughout my career, I have worked to level the playing field for Americans seeking to achieve financial freedom, by advocating for and promoting fairness, transparency, education and innovation," he said. "I look forward to bringing this same relentless focus to the digital assets industry."