Binance, the world’s leading stock exchange in terms of trading volume, is under fire from regulators.
Binance announced changes that help it better comply with local regulations, including more severe restrictions for customers who have not completed all stages of their user verification process.
Starting today, new users of the exchange will be limited to daily withdrawals of 0.06 bitcoin, or the equivalent of around $ 2,000, if they haven’t completed the platform’s basic account verification. The previous limit was 2 BTC per day, which is around $ 70,000 at today’s prices.
We are enhancing our KYC efforts to promote our leadership in this area.
Daily withdrawal limits will be adjusted from 2 BTC to 0.06 BTC (approximately ~ $ 2,000 USD) for accounts that have only passed basic account verification.https://t.co/gdim6HdLhU
– CZ 🔶 Binance (@cz_binance) July 27, 2021
New users will begin to face these restrictions between August 4 and 23. Those who pass all the verification steps can withdraw up to 100 BTC.
Binance uses three levels of user verification. The basic level asks for name, nationality, date of birth and address. It allows users to quickly exchange cryptocurrencies for other cryptocurrencies, deposit funds and withdraw cryptocurrencies, as well as a very small amount of fiat money, $ 300 during the life of the account.
The intermediate level requires identification and photos to corroborate some of the information provided, while the advanced verification also requires proof of address in the form of a utility bill or bank statement.
Together, these tiers make up the KYC (Know Your Customer) process of the exchange. KYC is a requirement for financial institutions: it aims to prevent criminals from laundering money or from people on a sanction list from accessing funds.
Binance has already said that it will strengthen the KYC process. In 2019, it partnered with technology company IdentityMind to automate its KYC and anti-money laundering processes. It had previously partnered with Refinitiv in 2018 for a similar process.
These moves were a means to combat Binance’s reputation for making it easy for traders to bend the rules by providing false information. Tighter withdrawal limits can have the additional effect of forcing people to go through a more intensive KYC process and give up some of their anonymity, as long as they are operating under a different identity.
In recent months, Binance has been in the news for most of the wrong reasons. Its UK trading service project, Binance Markets Limited, has been the subject of a customer service warning from the country’s securities regulator, the Financial Conduct Authority. Japan’s Financial Services Agency warned in June that the exchange was operating in the country without being registered. And the Italian securities regulator said earlier this month that Binance was “not authorized to provide investment services and activities”In this European country.
Binance CEO Changpeng Zhao, better known as CZ, said the company is working to gain an advantage, saying: “Binance is ready to help regulators around the world and together find the optimal way to establish a level playing field – consumer protection is important to all of us.“
He added that the company seeks to hire “executives with experience in regulations and compliance.”
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