TL;DR Breakdown
- Binance Exchange mandate new KYC, AML checks for users.
- Binance KYC move to help boost exchange reputation before financial institutions.
Binance exchange has introduced a new mandate to enhance its Know-Your-Customer (KYC) and Anti-Money Laundering (AML) efforts.
The move comes as the exchange and crypto industry faces increased scrutiny from regulators. The exchange introduced a new user verification policy for asset and institutional protection, primarily from criminal activity.
KYC policy becomes crypto exchange trend
To enhance their compatibility with the 21st-century trend and align with financial regulators’ policies, crypto firms have been mandating KYC checks for their users.
It has become a pivotal part exchanges are to comply with to help improve their profile and maintain their presence in the market.
Kraken, a different US crypto exchange, also announced tighter KYC restrictions for margin traders in the country. Binance exchange announced its improved user protection through user verification on Friday.
The KYC protection measure is similar to how financial service providers are required globally to carry out KYC checks in their institutions to curb illegal activities.
It is safe to say the number one exchange is trying to be proactive as a firm that manages significant assets on behalf of its users.
Hence, before users can access services on Binance like product offering, deposits, trades, and withdrawals, an intermediate verification step has to be completed.
Firms that handle significant assets on behalf of their users mandate this process to have knowledge of their users and who their users do business with. This knowledge protects both the institution and the assets.
How improved KYC check would help Binance exchange
Reportedly, Binance KYC’s proactive move is a step towards boosting its reputation with banks, financial institutions and other partners.
The move would increase assurance that the exchange can operate safely before banks and other partners. It is believed that KYC checks like user’s ID document and country of origin act as a deterrent to would-be money-launderers and other criminal elements.
