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Binance’s general counsel faces some of the toughest challenges in the cryptocurrency industry
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Eleanor Hughes, Binance’s general counsel, has a lot to keep her busy with, from the giant cryptocurrency exchange’s thorny dispute with Nigerian officials to strict monitoring by U.S. authorities as part of a historic plea deal.
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Published June 23, 2024 • 3 minute read
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(Bloomberg) — Eleanor Hughes, Binance’s general counsel, has a lot to keep her busy, from the giant cryptocurrency exchange’s thorny dispute with Nigerian officials to strict monitoring by U.S. authorities as part of a historic plea deal.
That plea deal with the Justice Department and U.S. regulators led to a $4.3 billion corporate fine and the imprisonment of co-founder Changpeng “CZ” Zhao for failing to allow criminals and terrorist groups to use the exchange.
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Reflecting on the panoply of challenges, Hughes described his role at the world’s largest digital asset trading venue as one of the “most interesting jobs in the legal profession”, one that raises new issues and questions daily.
“We believe that Binance has overcome some really significant challenges in the last six months and we have proven to be a very resilient company despite everything that has happened,” he said in an interview.
US supervision
Hughes, who has been at Binance since 2021 and now leads a team of 80 lawyers, worked under billionaire Zhao until he stepped down as CEO as part of November’s US deal and handed the reins to Richard Teng .
The exchange now faces years of compliance monitoring by the Department of Justice and the U.S. Treasury’s Financial Crimes Enforcement Network. Teng said this month that the designated monitors – Forensic Risk Alliance and Sullivan & Cromwell – have already begun the task.
According to Hughes, Binance has developed an internal team led by Sally Molloy, former deputy head of the Department of Justice’s anti-fraud section, to liaise with monitors. Molloy helped oversee post-resolution compliance obligations such as monitoring in that previous role, a spokesperson said.
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The dispute with Nigeria erupted in February, when authorities in Africa’s most populous nation arrested two Binance employees, including U.S. citizen Tigran Gambaryan, the company’s financial crime compliance officer.
Deputy Angst
His colleague Nadeem Anjarwalla escaped but Gambaryan remains in prison in Abuja even though some charges have been dropped. US lawmakers have accused Nigeria of holding him hostage, a claim the local government rejects.
Binance’s problems in the West African country had been brewing before the detention, after authorities blocked cryptocurrency channels amid a crackdown on speculation against the naira.
“One of the charges against us is that we are not registered,” Hughes said. “There are no cryptocurrency exchanges registered there. And we have contacted the Nigerian Securities and Exchange Commission on two occasions with letters and have received no response.”
All this comes as Teng attempts to reshape the business. During his tenure, the company changed how Binance works with prime brokers, tightened requirements for listing new digital tokens and spun off its venture capital arm. But the company has yet to formally designate a global headquarters or release a fully audited set of accounts.
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“Delay” control
“It’s obviously very difficult for cryptocurrency companies as a whole to engage with third-party auditors, because many of them have decided not to engage with any digital asset or cryptocurrency company,” Hughes said. “This is causing us a bit of a delay.”
Binance currently has more than 5,000 employees, a spokesperson said. Customer assets on the platform have increased by $42 billion in 2024 as cryptocurrency markets rise, Teng said in a recent interview.
Aiding this growth is the progress Binance is making in some markets where it had previously been hampered by regulatory disputes.
Recently in India, for example, the exchange registered with the Financial Intelligence Unit as a step towards resuming operations in the country. This week the FIU said it had imposed a fine of 188.2 million rupees ($2.2 million) on Binance for providing cryptocurrency-related services without complying with the country’s anti-money laundering rules.
In Thailand, the Gulf Binance Co. platform – a joint venture with billionaire Sarath Ratanavadi’s Gulf Energy Development Pcl – went live this year after obtaining the necessary permits. In 2021, Thailand’s securities regulator filed a criminal complaint against Binance for operating an unlicensed digital asset business.
“This is something we’re trying to do in a number of different markets: solve these historical problems,” Hughes said, adding that Binance aims to work with regulators “even in very difficult jurisdictions.”
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