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Highlights
- Cryptocurrency platform Binance has announced that it will tighten its customer verification requirements.
- The platform strongly advised its new and existing users to complete the verification process as soon as possible to avoid delay and restrictions.
- The decision was taken to strengthen its efforts against money laundering and financial crimes.
World’s leading Cryptocurrency exchange Binance has recently announced that it will be tightening the verification requirements of its expanded know-your-customer (KYC) policy on its platform for customer in a bid to strengthen efforts against money laundering and enhance users’ protections to offers a safe crypto environment.
Earlier, the crypto platform has faced regulatory scrutiny and warnings from watchdogs across the world, which was concerned over the use of crypto in money laundering and risks to customers.
The business of Binance largely expanded with crypto derivatives trading, which uses high amount of leverage, however watchdogs raised their concerns over the high risk the product possesses to users and the broader economy.
Binance asked its users to go through intermediate verification to improve its risk management obligations, customer needs to provide government-issued ID documents and pass a facial verification process to continue trading in its platform.
Further, if existing users disagree or do not complete intermediate verification, their account permissions will temporarily change to “Withdraw only” and they will only be able to close positions, redeem tokens, withdraw funds and cancel orders.
The platform strongly advised its user to complete the verification process as soon as possible to avoid delay and restrictions.
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Currently, the basic verification process takes one day. However, verification of all documents such as facial verification, government ID and address proof will take 20 days to get processed.
The crypto exchange has a subsidiary registered in the Cayman Islands, which has scaled back its products and told that it wants to enhance relations with regulators.
Changpeng Zhao, CEO of Binance said that his company wants to have a sustainable ecosystem that is safe for all customers. The company has pumped in a lot of money in security and user protection, which supports law enforcement from around the world.
Zhao also shared his intention to work more collaboratively with regulators to improve global standards and strengthen its platforms Know-your-customer (KYC) and Anti-money laundering (AML) positions, and told that the compliance-based recruitments have grown by over 500% since last year.
The crypto exchange has appointed a former US Treasury criminal investigator this week as its global money laundering reporting officer.
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Last month, the exchange changed the daily withdrawal limit to 0.06 Bitcoin from 2 Bitcoin for the customers who did not complete a full KYC verification.
Further, to enhance security and safety of customers the exchange adopted other measures such as it is planning to decrease maximum leverage from 100x to 20x.
Earlier, European Central Bank President Christine Lagarde, US Treasury Secretary Janet Yellen and other regulators globally raised their voice over the crypto money laundering concerns.
On Monday, the Dutch Central bank said, the crypto platforms which handled spot transactions of US $455 million in July, was not in concession with its anti-terrorist financing and anti-money laundering laws.
Many crypto exchange platforms across the world are also asking their users to submit their ID documents including Gemini and Coinbase Global Inc.
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