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Binance announces mandatory, immediate KYC for all citing ‘user protection’

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Binance, the world’s biggest cryptocurrency exchange, has been under heavy fire from global regulatory agencies for a while now. Following such setbacks, the exchange has been quick to initiate compliance efforts in a bid to reverse the tide.

It is in the news again today after it announced that all users will be required to complete Know Your Customer (KYC) verification. CEO Changpeng Zhao aka CZ shared this update too, with the exec asserting “Action speaks louder than words.”

According to a statement, Binance took the step to enhance user protections and provide a safe crypto-environment for everyone. It added,

“We are announcing these measures to double down on efforts relating to Know Your Customer (KYC) and Anti-Money Laundering, which will further enhance user protection and combat financial crime.”

These measures include,

  • Effective immediately, all new users now must complete Intermediate Verification to access Binance’s services
  • All existing users who have not completed the Intermediate Verification, their account access will be limited to “withdrawal only”

These measures will be carried out in a phased manner to minimize disruption. “Once users complete the Intermediate Verification, they will be able to resume full access to Binance products and services,” the exchange concluded.

A regulatory history

A few weeks ago, Binance implemented a restriction on daily withdrawal limits to 0.06 BTC (Previously, 2 BTC) for accounts with basic KYC verification. The lowering of the limit for basic verification made it more difficult for unknown users to abuse the previous daily limit.

Meanwhile, Binance has been censured for its lack of KYC and financial reporting rules in the past. One of the reasons why Binance collaborated with CipherTrace Traveler is to achieve compliance with the Financial Crimes Enforcement Network’s (FinCEN) and the Financial Action Task Force’s (FATF) travel rule regulations.

On a separate note, hundreds of Binance users have sought damages for the money they lost during major service outages on the platform.

Is there an end to Binance’s woes? Well, it’ll be an interesting one to follow over the coming days.

Community reactions

Reactions, as expected, were mixed, with many undecided on whether this development is actually bullish or bearish. According to Three Arrow Capital’s Zhu Su, for instance,

Others, however, are of a different opinion, with one claiming,

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Shubham is a full-time journalist at AMBCrypto. A Master's graduate in Accounting and Finance, Shubham's writings mainly focus on crypto-regulations across the United States and Europe. Also, a die-hard Chelsea fan #KTBFFH.