TL;DR Breakdown
- Binance makes KYC requirement mandatory for all users.
- Access to Binance services would be limited for users who don’t complete KYC.
- Other ways Binance has managed its regulatory issues before mandatory KYC.
Number one crypto exchange, Binance, has announced that a know your customer (KYC) check has been made compulsory for all its customers from today (Friday).
This announcement comes as regulators globally continue to mount pressure and crackdown on the crypto exchange.
In the Binance announcement on Friday, the exchange noted that users much complete their know your customer check to access the exchange services, including cryptocurrency deposits, trades, and withdrawals.
The firm gave its reason as constant review of its products and services to “determine changes and improvements in light of evolving global compliance standards.”
The know your customer check requires users to submit a government-issued ID and facial verification. Users who defy the Know Your Customer check would not have full access to Binance services. They would only be allowed to withdraw, cancel orders, and close positions.
Two weeks ago, the exchange limited the daily withdrawal limit for non-verified accounts from a maximum of 2 BTC to 0.06 BTC. All these moves are in line with Binance becoming more regulatory compliant.
CEO Changpeng Zhao made it clear that the company’s immediate focus would be to strengthen its regulatory position. He also said he is ready to step down for someone with significant experience on the regulatory side who can help the exchange move ahead of its current regulatory troubles.
Before compulsory know your customer checks, how Binance handled regulatory compliance
The exchange has been in the bad books of many regulators worldwide, which has made the exchange worried. More than 10 regulators in different countries only in July warned Binance of operating illegally.
Hence, the exchange has been working on putting an end to the shamming embarrassment. One way was how the exchange promised to build regional headquarters in every country it is operational in.
The firm also stopped trading its stock token after German regulators expressed concerns. Binance also dropped its high leverage trading limit from over 100X to 20X and later stopped its crypto derivative offerings across Europe and Hong Kong.
