Binance Finetunes KYC, Anti-Money Laundering Rules Aiming to Safeguard its Business, Users

In order to complete KYC on the Binance platform, a user is required to provide basic details like name and email id along with having to clear a background check for risk assessment.

By Radhika Parashar | Updated: 13 July 2022 13:26 IST

Binance Finetunes KYC, Anti-Money Laundering Rules Aiming to Safeguard its Business, Users

Photo Credit: Facebook/ Binance

Binance, founded in 2017 by Chengpeng Zhao, aims to become world’s most licenced crypto exchange

Highlights

Binance is running risk assessment on its users
Binance is checking if KYC details are up-to-date
Binance is also running background check to give users ‘verified’ status

With the crypto sector showing signs of continuous expansion and adoption, Binance crypto exchange is taking steps to stay ahead of issues that may damage its business and expose its users to financial risks. The company has mandated a three-step KYC system to get a ‘verified' status on its platform. KYC or Know Your Customer is essentially a list of questions that prove a user's identity. Since cryptocurrency transactions are largely untraceable, they could be misused for funding illicit activities. Which is why, several crypto firms have finetuned their KYC requirements.

Binance has teamed-up with service providers in the KYC and Anti-Money Laundering (AML) categories in order to keep its operations protected from being exploited. These providers include CipherTrace, Elliptic, WorldCheck, Onfido, and Jumio, a CryptoPotato report said.

In order to complete KYC on the Binance platform, a user is required to provide basic details like name along with having to clear a background check for risk assessment.

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The company has also enabled monitoring of users' KYC details to ensure that they are up-to-date.

The idea, is to make sure that suspicious or potentially fraudulent activities in the crypto sector do not go unnoticed and unreported.

Crypto-related scams are rising in numbers briskly. In a recent report, BanklessTimes said Americans alone lost $1 billion (roughly Rs. 8,000 crore), falling prey to romance and institutional scams.

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If all KYC details are provided properly, crypto exchanges will be able to maintain a productive relationship with other financial institutions like banks and payment providers that are already part of the traditional financial systems.

The company, founded in 2017 by Chengpeng Zhao, is taking efforts to become the most licenced crypto exchange in the world. As per Zhao, Binance has been using Reuters' identity verification product, WorldCheck, since 2018 as a KYC verification tool.

> Binance has been using Reuters WorldCheck as one of the KYC verification tools since 2018. > > — CZ :large_orange_diamond: Binance (@cz_binance) July 11, 2022

At this point, with crypto exchanges like Bybit, Coinbase, BlockFi, and Cryptocom laying-off employees to keep business efficient — Binance is seemingly taking a different approach to keep its businesses afloat.

The company, that has operational licences in three UAE regions including Bahrain, Abu Dhabi, and Dubai, has also recently announced an upcoming platform for VIP and institutional investors.

Named ‘Binance Institutional', this flagship programme will extend improved and upgraded financial services around crypto assets. The service will offer rewards with discounts and other privileges to big-capital investors.

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Further reading: Cryptocurrency, Binance, Chengpeng Zhao, KYC

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More