KYC now mandatory on Binance.

in LeoFinance11 months ago

BinanceVerification.png

KYC ON BINANCE

So KYC is now a requirement on Binance. An announcement released today - and tucked away under the heading “Updates to Binance Services” - outlines the following new requirements:

  • “Effective immediately, all new users are required to complete Intermediate Verification to access Binance products and service offerings, including cryptocurrency deposits, trades and withdrawals.

  • Existing users who have not yet completed Intermediate Verification will have their account permissions temporarily changed to “Withdraw Only”, with services limited to withdrawal, order cancellation, position close, and redemption. This will be carried out in phases to minimise user-experience disruption, from now through 2021-10-19 00:00 AM (UTC). Existing users will be informed directly with more details. Once users complete the Intermediate Verification, they will be able to resume full access to Binance products and services.”

Here’s the announcement in full:

https://www.binance.com/en/support/announcement/51bf294e26324211a4731ca998e110ca

Intermediate verification requires an ID card (e.g. passport) and selfie.

THOUGHTS

It’s no surprise that Binance has headed in this direction. There has been constant regulatory pressure on the largest crypto centralised exchange over the last few months with Anti-Money Laundering (AML) and Know Your Customer (KYC) requirements at the forefront of regulator concerns.

I would expect all large CEX to follow suit to the extent that they haven’t reached this point already. Off the top of my head I’m pretty sure that Coinbase, Huobi Global, FTX, and Gate all require some form of identity verification. This is quickly becoming the industry norm.

So what's next? For me, this does raise questions around decentralised exchanges and wallets. There’s not a lot of point implementing Anti-Money Laundering on centralised exchanges if money flows freely between the CEX and DEX and wallets.

So over time I would expect the AML requirements to flow down the chain. For example:

  • CEX will only interact with other businesses that have implemented KYC.
  • CEX will require you to register your wallet addresses if you want to transfer between the wallet and the CEX.

However this approach sounds pretty un-implementable. Eventually your wallet will interact with another wallet that doesn’t have KYC.

So perhaps there will be some form of on-chain analysis used to pick up money laundering patterns further down the chain?

In the end crypto moves more quickly than regulators and will always find a way to work around their requirements. Regulators are entering a brave new world and will need to develop their own tools if they want to keep pace.

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AML & KYC is just a totalitarian control measure. Most terrorist funding comes from governments and most money laundering is done is USD.

I think governments will keep pushing these requirements. Crypto will adapt as always.

On the plus side I think that CEXes embedding existing regulations builds a bridge for wider crypto adoption.

True.

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That's sad to see.

The solution doesn't have to be technical. In fact it shouldn't be as KYC isn't appropriate in other contexts either.

As the wealth, numbers and influence of crypto adopters grows we should devote some of that growing strength to fixing broken regulatory ideas like KYC.

I can't see governments moving away from KYC / AML. They use it for:

  • Preventing money laundering and financial crime.
  • Preventing funding of terrorists.
  • Implementing sanctions.

They'll not be giving up those powers easily.

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No one ever gives up power easily. If we don't demand that they give those powers up they won't give them up at all.

Not one of those things — nor all three of them put together — justifies pre-emptive intrusions into the financial affairs of tens of millions of people who aren't doing any one of them.

KYC once wasn't a thing and civilization got on just fine — acquiesce for more than a generation or so and it will be forgotten that it was so. The advent of crypto, and the changes miniature-tiger aptly noted it forces regulators to make to keep apace, may well be the best chance to strike down KYC since its inception.

This will become mandatory eventually for all centralised exchanges. It is too hard to implement on decentralised exchanges and they dont operate as brokers.

I dont think this will have much of a negative impact if you assess coinbase as it is KYC. If anything, I'd anticipate Binance to become more accessible to alot more people and profits will go sky high

Yes, I think increasing compliance of CEXes will bring more money into crypto from the mainstream.

It wouldn't surprise me to see CEXes picking up banking licences soon. Get your salary paid straight into Binance bank. Flip some straight into a basket of crypto on a monthly basis.

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