A former top U.S. banking regulator is set to join Binance, one of the world’s biggest bitcoin exchanges, in the latest move by a cryptocurrency company to deepen its ties to Washington.
Brian Brooks, an acting head of the Office of the Comptroller of the Currency under the Trump administration, will become the new chief executive of Binance.US, the U.S. affiliate of overseas crypto-exchange giant Binance Holdings Ltd.
Mr. Brooks said in an interview that he would start the new job May 1. A spokeswoman for the crypto exchange confirmed the hire.
During his time at the OCC, Mr. Brooks was dubbed the “CryptoComptroller” on social media for his friendly attitude toward digital currencies. Under his watch, the OCC released guidance clarifying that banks could provide cryptocurrency custody services and use stablecoins to facilitate payment activities, moves that helped make it easier for traditional financial institutions to get into crypto. Stablecoins are a type of digital coin backed by a commodity or traditional currency like the U.S. dollar.
Mr. Brooks was acting head of the OCC, a unit of the Treasury Department, from May 2020 to January. Before joining the OCC he was the chief legal officer of Coinbase Global Inc., the U.S. bitcoin exchange. He also previously worked as general counsel of 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 emerging U.S. regulatory framework for digital currencies. But they are also a striking contrast to the early, libertarian vision of bitcoin as a way to conduct transactions outside the reach of governments.
Last month, Coinbase said it was hiring the Securities and Exchange Commission’s former top regulator for stock exchanges, Brett Redfearn, as a vice president. Also in March, Binance said it was hiring Max Baucus, a former Democratic senator from Montana and U.S. ambassador to China, as a policy and government-relations adviser.
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This month, Coinbase joined several other financial firms in forming the Crypto Council for Innovation, a trade group that aims to lobby policy makers on crypto regulation. Among the group’s first moves was to release a paper by Michael Morell, a former acting director of the Central Intelligence Agency, arguing that the media and government officials had significantly overstated the role of bitcoin in illicit finance.
Crypto companies are flush with cash after a massive run-up in the digital-currencies market. Bitcoin has nearly doubled since the beginning of the year to around $55,000. Coinbase went public on the Nasdaq Stock Market last week and boasts a market capitalization of $87 billion.
Binance runs the world’s largest cryptocurrency exchange by trading volume, executing tens of billions of dollars of trades a day, according to data provider CryptoCompare. Founded in 2017, Binance was initially based in China. It later moved its offices to Japan and Malta and now says it is a decentralized organization with no headquarters.
Binance launched its U.S. affiliate in 2019, a move that allowed the company to legally serve American customers. Binance’s main overseas exchange blocks Americans to avoid running afoul of U.S. regulators.
Based in San Francisco, Binance.US says it is a separate company from the overseas Binance. 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 is under investigation by the Commodity Futures Trading Commission to determine whether the exchange allowed U.S. residents to trade derivatives in violation of CFTC rules. Binance has said it complies with U.S. regulations. A CFTC spokesman declined to comment.
Mr. Brooks said his priorities at Binance.US would include making the exchange a robust competitor to Coinbase and reinforcing 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.
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