What exchange A global cryptocurrency exchange facing increasing scrutiny from regulators, Binance has introduced a user verification policy for institutional and asset protection against criminal activity.
KYC regulations have become essential for compliance with the exchanges cryptocurrency, if they want to continue to gain blanket approval and comply with regulators.
Recently, Kraken announced stricter KYC restrictions in the United States.
For the traders with margins, and Binance seeks to strengthen its user protection by enforcing user verification.
Just as regulators globally require financial service providers to have KYC policies to curb illegal activities, Binance seeks to be proactive as a exchange of cryptocurrency that manages important assets on behalf of its users.
For users to now access Binance product and service offerings, including deposits, exchanges and withdrawals, an intermediate verification step is required.
This type of step is important for institutions that manage important assets on behalf of their users, so that they know their users and with whom they do business. This knowledge protects both the institution and the assets.
KYC improves Binance’s profile
Binance sees this as a step to improve its reputation with banks and other partners, by increasing the assurance that exchanges Global companies like yours can operate safely.
The initial barrier posed by an intermediate verification step, which requests, among other things, the user’s identity document and the country of origin, acts as a deterrent to potential money launderers and other criminal elements.
Binance recently appointed Greg Monahan as head of money laundering reporting, in an effort to bolster Binance’s international investigation and anti-money laundering operations.
Wider benefits for cryptocurrencies
It is useful to view Binance user verification as a step in the positive direction for the entire crypto industry.
As more fiat currency and mainstream users flow into cryptocurrency, regulators’ ears have perked up, prompting them to insist that centralized platforms that handle crypto assets must be able to prevent illegal funds from entering their system.
Therefore, compliance by the platform can only benefit the crypto industry, by improving user trust and adoption of purchases and payments with cryptocurrencies.
In January 2021, the exchange BitMEX imposed similar regulations on its users, after facing legal action from US authorities.
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