Binance Begins Internal Investigation into KYC Bypass
- The CNBC article is the most recent of several accusations made against Binance. The exchange has been accused of aiding terrorism financing, money laundering, and other criminal operations.
- China is more interested in establishing a CBDC than in allowing cryptocurrency trading.
Binance users were shocked by a recent report that claimed that the exchange’s employees were assisting Chinese users to bypass some security tools, including the Know Your Customer (KYC) protocol. A Binance spokesperson explained that the exchange was taking serious steps to address these issues, as employees are “explicitly forbidden” from aiding users to bypass any established procedure.
The CNBC report claims that over 220,000 registered users could read shared interactions on methods to get around KYC, residency, and verification measures in Binance’s Chinese-language chat groups. The communications purportedly came from accounts identifying as Binance staff or as “Angels”.
The CNBC report also raised concerns regarding Binance’s dedication to transparency and regulatory compliance. The news would also come as a major blow to Binance, as the exchange has come under regulatory scrutiny in a number of nations, including the US, Japan, and the UK, due to its operations and compliance with anti-money laundering policies.
Reacting to the report, a Binance spokesperson said,
We have launched an investigation into employees who may have violated our internal policies, including wrongly soliciting or making recommendations that are not allowed or in line with our standards.
The company’s spokesperson reiterated that Binance has established “advanced detection tools” that enable it to monitor users from blacklisted regions and actively block VPNs from such regions. The Binance representative added that the exchange had “multiple manuals and AI-driven processes” to prevent users from getting around important security measures. Binance claims that the presence of workarounds to its security measures is “extraordinarily rare.”
China remains a hostile nation to cryptocurrencies and imposed a ban on the industry in 2021. Exchanges such as Binance are prohibited from offering their services. So, users who bypass KYC measures would face heavy consequences if discovered.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
