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:
Intermediate verification requires an ID card (e.g. passport) and selfie.
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.
Posted Using LeoFinance Beta