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Following regulatory pressure, Binance tightens anti-money laundering controls


Binance, the world's largest platform, has been under fire from regulators around the world in recent months, who are concerned about the potential for cryptocurrency to be used to launder money and the risks that volatile crypto trading poses to consumers.

Regulators have long been concerned about the potential for cryptocurrency exchanges to launder money, with US Treasury Secretary Janet Yellen and European Central Bank President Christine Lagarde both raising concerns this year.

Binance was found to be in violation of Dutch anti-money laundering and anti-terrorist financing laws by the Dutch central bank on Monday.

To access Binance's products and services, users must first complete a verification process, according to the company's website. Those who haven't done so will be limited to withdrawing money, canceling orders, and closing positions.

Document-based ID checks were previously only required for users who wanted higher trading limits at Binance. Binance announced that users will now be required to upload an ID card, driver's license, or passport to prove their identity. It said the move would "further enhance user protection and combat financial crime."

Binance CEO Changpeng Zhao, a Canadian known by his nickname "CZ" tweeted a link to the Binance announcement saying "actions speak louder than words".

Crypto exchanges' methods for conducting identity and background checks vary, with some requiring extensive documentation and others allowing users to sign up for accounts with just an email address.

According to data from CryptoCompare, Binance spot trading volumes in July were $455 million, down nearly a third from a month earlier but still the highest in the world.

According to British court documents and Malaysia's securities watchdog, Binance's corporate structure is opaque, despite the fact that its holding company is registered in the Cayman Islands.