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Cryptocurrency giant Binance.US hires former banking regulator

Cryptocurrency giant Binance.US hires former banking regulator

A top former US banking regulator is set to join Binance.US, one of the world’s largest bitcoin exchanges, in a cryptocurrency firm’s latest move to deepen its ties with Washington.

Brian Brooks, acting head of the Office of the Comptroller of the Currency in the Trump administration, will become the new chief executive of Binance.US, the U.S. subsidiary of foreign crypto exchange giant Binance Holdings Ltd.

Mr Brooks said in an interview that he would start the new job on May 1. A spokeswoman for the crypto exchange confirmed the hiring.

While at the OCC, Mr. Brooks was dubbed the “CryptoComptroller” on social media for his friendly attitude towards digital currencies. Under his leadership, the OCC issued guidelines clarifying that banks could provide cryptocurrency custody services and use stablecoins to facilitate payment activities, measures that made it easier for traditional financial institutions to access crypto. Stablecoins are a type of digital coin backed by a commodity or traditional currency like the US dollar.

Mr. Brooks served as acting head of the OCC, a unit of the Treasury Department, from May 2020 to January. Prior to joining the OCC, he was Chief Legal Officer of Coinbase Global Inc., the US bitcoin exchange. He also previously worked as general counsel for mortgage giant Fannie Mae.

Crypto companies have hired a number of former officials in recent months as they increasingly seek mainstream acceptance. Such hires could help companies such as Binance and Coinbase navigate potential pitfalls in the new US regulatory framework for digital currencies. But they also contrast starkly with the early libertarian view of bitcoin as a means of transacting beyond the reach of governments.

BlockFi, a cryptocurrency startup, said Tuesday it was adding former Commodity Futures Trading Commission Chairman J. Christopher Giancarlo to its board. Last month, Coinbase announced that it was hiring the Securities and Exchange Commission’s former top regulator for exchanges, Brett Redfearn, as vice chairman. Also in March, Binance announced that it was hiring Max Baucus, a former Democratic senator from Montana and US ambassador to China, as a policy and government relations advisor.

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This month, Coinbase joined several other financial companies to form the Crypto Council for Innovation, a trade group that aims to lobby policymakers on crypto regulation. One of the group’s first moves was to publish an article by Michael Morell, former acting director of the Central Intelligence Agency, claiming that media and government officials had vastly exaggerated bitcoin’s role in illicit finance.

Crypto companies are teeming with cash after a massive surge in the digital currency market. Bitcoin has nearly doubled since the start of the year to around $55,000. Coinbase went public on the Nasdaq Stock Market last week and has a market capitalization of $87 billion.

Binance runs the world’s largest cryptocurrency exchange by trading volume, executing tens of billions of dollars worth of trades per day, according to data provider CryptoCompare. Founded in 2017, Binance was initially based in China. It then moved its offices to Japan and Malta and now claims it is a decentralized organization with no headquarters.

Binance launched its US subsidiary in 2019, a move that allowed the company to legally service US customers. Major foreign exchange Binance blocks Americans to avoid clashing with US regulators.

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San Francisco-based Binance.US says it is a separate company from Binance overseas. Both were founded by the same person, Changpeng Zhao, who is CEO of Binance and a board member of Binance.US.

Bloomberg News reported in March that Binance was under investigation by the CFTC to determine whether the exchange allowed US residents to trade derivatives in violation of CFTC rules. Binance said it complies with US regulations. A CFTC spokesperson declined to comment.

Brooks said his priorities at Binance.US would include making the exchange a strong competitor to Coinbase and strengthening its commitment to regulatory compliance.

“I wouldn’t have taken this job if I didn’t have a strong commitment from the board to lead a strong compliance program,” he said.

Corrections & Amplifications
This article has been updated to clarify references to Binance.US.

Write to Alexander Osipovich at [email protected]

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