2 mins read Following the collapse of FTX and Coinbase’s decision to settle with New York state regulators and pay $100m in the first week of January, more companies seem to now be interested in bolstering their compliance teams.
One of those is crypto exchange Kraken which has been investing in new team members, and in its compliance department.
The number of staff who now deal with anti-money-laundering and know-your-customer verifications and rules has increased by 55% over the past 12 months, even though the company had to cut staff in November.
Regardless, Kraken has preferred to stick to its guns and ensure that its compliance team remains unscathed by the layoffs in order to avoid costly enforcement actions against it.
Binance, another cryptocurrency giant, who hired Kraken’s former head of compliance, is also becoming aware of increased legal interest against the company.
Investigators in various states in the US are looking into the company, and companies it has worked with on US soil.
While a stricter enforcement action against Binance is unlikely, it goes to show that even Binance needs to focus on ensuring that its offer, products and services toe the regulatory line.
Companies are aware that in the current climate, enforcement actions cost companies more than they would have otherwise spent on running a sizable compliance team that can provide them with the necessary level of protection to maintain operations.
As OKX crypto exchange’s government relations officer, Tim Byun, told Axios, the costs could easily triple or even quadruple.
However, as some companies seek to be more complaint, others are exiting the sector altogether, with Silvergate reassessing its exposure to crypto, and Metropolitan bank cutting all ties outright.
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