Binance, a global cryptocurrency exchange under increasing regulatory scrutiny, has implemented a user verification policy to protect assets and institutions from criminal activity.
Binance has launched ‘Intermediate Verification.’
KYC regulations have become mandatory for crypto exchanges to follow if they want to maintain mainstream acceptance and comply with regulators. Kraken recently announced tighter KYC restrictions for margin traders in the United States, and Binance is looking to strengthen its user protection by enforcing user verification. Binance is attempting to be proactive as a crypto exchange that handles significant assets on behalf of its users, much like financial service providers are required by regulators worldwide to have KYC policies to curb illegal activities.
An intermediate verification step is now required for users to access Binance’s product offerings and services, including deposits, trades, and withdrawals. This type of step is important for institutions that handle significant assets on behalf of their users, as it allows them to know who their users do business with. This understanding safeguards both the institution and its assets.
Binance’s profile benefits from improved KYC.
Binance sees this as a step toward improving its reputation with banks and other partners by providing more assurance that global exchanges like theirs can operate safely. The initial deterrent posed by an intermediate verification step, which requests, among other things, the user’s ID document and country of origin, acts as a deterrent to would-be money launderers and other criminal elements. In an effort to strengthen Binance’s international investigation and anti-money laundering operations, the company recently appointed Greg Monahan as head of money laundering reporting.
Additional advantages for cryptocurrency
It is beneficial to consider Binance’s user verification as a step forward for the entire crypto industry. As more fiat currency and mainstream users pour into cryptocurrency, regulators’ ears have perked up, prompting them to insist that centralized platforms that handle crypto assets be capable of preventing illegal funds from entering their system. Thus, platform compliance can only benefit the crypto industry by increasing user trust and adoption of crypto purchases and payments. After facing legal action from American authorities, the BitMEX exchange imposed similar regulations on its users in January 2021.