Binance’s new compliance chief sees mission to put crypto exchange giant ‘beyond reproach’

Noah Perlman has one of the toughest jobs in crypto.

As the recently appointed chief compliance officer at Binance, Perlman sees his role as putting the world’s largest crypto exchange “beyond reproach” as it battles to restore its reputation with regulators.

That reputation has been hit by a series of run-ins with authorities worldwide, including getting banned from opening a division in the UK in 2021 and, more recently, a Commodity Futures Trading Commission lawsuit that accused Binance of operating in the U.S. illegally.

“The challenge is when you have these legacy issues, those mistakes can look like it’s still part of a pattern and practice from the old thing,” Perlman said in an interview in London this week. “It’s just hyper-important for us to be above and beyond reproach going forward — so that we can put those legacy items behind us.”

An alumnus of both Wall Street bank Morgan Stanley and crypto exchange Gemini, Perlman started at Binance about three months ago and reports directly to CEO Changpeng Zhao. He’s based in the U.S., but insists he has nothing at all to do with Binance US, the exchange’s American unit. His remit covers the rest of the world, outside the U.S.

He agreed to come aboard after CZ, as Zhao is often known, convinced him that Binance has “turned the corner” on compliance. According to Perlman, those words have also been matched with action. The company has grown its compliance team to about 750 people and added items new tools for checking clients’ identities as they’re onboarded.

Binance’s compliance challenges

Perlman likens the challenge of regulatory compliance to adjusting a dial to find an “equilibrium.”

“You can turn the dial one way or another. I want to protect Binance from bad actors. Easy to do: just turn the dial all the way, then we’ve got no users. And so how to calibrate that is a challenge.”

To reassure regulators that Binance’s culture has indeed changed, Perlman says it’s important to “overcommunicate” with them and ensure all decisions are clearly documented.

Binance’s Chief Strategy Officer Patrick Hillmann, who sat in on the interview, doubled down on the idea that Binance needs to overcommunicate to reassure both regulators and users. He added that the company is also trying to give more information when technical faults halt trading, for example.

The information vacuum

“We’ve gotten the leadership team in the mindset — on the tech side too — that you have to go above and beyond,” Hillmann said. “Just tell them what is the issue, even if it’s stupid, if it’s embarrassing, it’s better to be out there and to explain this to people and make them understand.”

When Binance leaves a “vacuum of information out there” it can “fill with speculation,” he added.

Perlman expressed optimism that, while financial regulators are currently on the warpath following November’s collapse of Binance rival FTX, their concerns will wane in time.

“Regulators are burned by something that’s happened in the industry and so they’re going to naturally calibrate tighter. And then it’ll subside — and that’s the equilibrium,” Perlman said. “We’re right now in a sort of post-FTX world where I can understand the focus being like, ‘we don’t trust you.’”

Working at Binance

Binance has had a wild ride since its inception in 2017, with its share of trading volume peaking at 62% in February — up from 20% five years earlier.

While Hillmann is keen to stress the exchange’s breakneck growth from a 30-person startup to its current headcount of more than 8,000, that growth has created some disgruntled employees along the way.

Binance’s rating on the company review site Glassdoor sits at 3.2 stars, compared with 3.7 stars for Coinbase and 3.4 stars for Gemini. Kraken, another crypto exchange, boasts 4.4 stars, although its listing comes with a warning that “this employer has taken legal action against reviewers.”

Common complaints about Binance on Glassdoor concern its long hours, “toxic” culture and a perceived necessity to speak Chinese to get ahead. On the other hand, its high pay is almost universally praised.

Asked about how he’s found Binance’s culture since joining, Perlman’s only comment is that “I’ve never seen a company so user-focused.”

Hillmann gave an example to illustrate that commitment to users, enthusing that all members of the executive team — including CZ — have to spend time every month answering customer support tickets.

Stronger compliance measures, of course, create pain for users, although Perlman is excited to make the process as slick as possible as Binance grows. “Can we make what is arguably a friction — maybe an unpleasant experience because we need [to ask about] your source of wealth — can we make that better?”

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