Binance Establishes First Ever Board of Directors Amid Legal Issues: Details

The recent few years have not been smooth sailing for Binance, which has time and again found itself surrounded by legal issues. In a first, Binance Holdings has established a board of directors comprising of seven members – who will weigh-in on the company's decision making and business-related resolutions as an assistance to CEO Richard Teng. The decision comes after the exchange recently received a summon from Nigerian authorities on suspicions of the exchange's involvement in facilitating unlawful activities.

This is the first time in seven years since Binance's inception that the company has formed a board of directors. Gabriel Abed, the ambassador of Barbados to the UAE has been appointed as the chairperson of Binance's board of directors. Company CEO Teng along with co-founder Heina Chen are also part of the board, an official blog post revealed.

“This significant change in leadership is viewed as a central shift at Binance under the supervision of CEO Richard Teng, appointed in November following Binance's settlement with US authorities. Since its establishment in China in 2017, Binance claimed to operate without a global headquarters. Teng, however, has indicated the desire to apply a more conventional corporate structure, including defining its headquarters and effective board of directors,” the post by Binance said.

Given the company's back-to-back legal tussles, it only seems natural that the company has decided to involve more industry experts to drive its operations.

Binance was probed by the US Securities and Exchange Commission (SEC) last year for violating US' business-related laws. In November 2023, the founder of the exchange, Changpeng Zhao pleaded guilty to failing to maintain an effective Anti-Money Laundering programme at the company.

Soon after, Zhao resigned as the company CEO and Binance paid a settlement amount of $4.3 billion (roughly Rs. 35,855 crore) in penalties to the US Justice Department, Treasury Department, and Commodity Futures Trading Commission.

Following Zhao's step down, Teng was named the new CEO of the exchange. However, even under Teng's leadership, Binance's legal issues do not seem any closer to being solved.

Earlier this month, Nigeria's House of Representatives Committee on Financial Crimes had reportedly summoned Binance CEO Teng on suspicions of the exchange's potential involvement in money laundering and terror financing. While details on Teng's arrival in Nigeria for this meeting remains unknown, a Binance executive in custody of Nigerian authorities reportedly escaped and flew abroad leaving the company in an awkward situation.

Binance's intention of becoming the most licenced crypto exchange in the world has also hit a roadblock after Philippines announced a ban on the exchange citing its lack of an official operational licence.

Since 2022, Binance had been assembling a solid team of lawyers to help it tackle legal hassles.