Moving Crypto Forward with Updated KYC Policies on Binance
Binance recently implemented a new requirement for users to be ‘Verified’ to enhance its Know Your Customer (KYC) and Anti-Money Laundering (AML) efforts, and further user protection.
For a global cryptocurrency exchange like Binance, enhancing KYC and AML leads to better user protection and risk management protocols, especially as crypto becomes more mainstream and crypto regulations around the world advance further.
As part of Binance’s continuous efforts to strengthen user protections, risk management protocols, and overall security, we have recently implemented a new KYC requirement for all users to be ‘Verified.’ In a recent announcement, we shared how the new requirement supports our wider efforts to create a sustainable ecosystem that is safe for all users.
Below, we will take a look at how KYC is used, how it is aiding crypto’s rise to the mainstream, and how our recent enhancements benefit all users in the long term.
Understanding How KYC Works and Crypto’s Role
For any company that handles significant assets on behalf of customers and users, getting to know who they are and who they deal with has become an important step in ensuring that both the assets and the financial institutions are protected from criminal activity. Every person or entity opening a new account with a bank or a similar financial institution has to disclose details such as their identities, sources of funds, and supporting documents such as IDs and so on.
KYC is required for all institutions that are permitted by regulators to provide financial services. Regulators from each country are responsible for ensuring that each company under its purview comply with KYC requirements with the ultimate goal of preventing money or assets from being used for illegal activities, such as fraud, money laundering, terrorist financing, and more.
As cryptocurrencies become more mainstream, it becomes important for industry participants to ensure that crypto transactions are not linked to illegal activities. The flow of more fiat currency and mainstream retail users into crypto means that regulators are starting to insist that platforms that handle crypto assets, especially those that provide fiat-to-crypto services, have the capacity to prevent the flow of illicit funds into their systems. This can only be a good thing for the health of the crypto ecosystem. The increased trust and security provided by strong KYC will make mainstream audiences more comfortable buying crypto and increase adoption of use-cases like payments.
For Binance, Stronger KYC Means Better Service
Our recently introduced requirement for all users to undergo KYC is an important step towards strengthening user protection. There are a number of benefits for both Binance and our users:
1. A More Secure Trading Environment For Users
A crypto exchange that has a strong KYC process in place is able to identify and understand who is using the platform, allowing us to assess potential risks to user protection.
Identity verification acts as a deterrent against people who may try to use the exchange for money laundering and other illegal activities. This initial barrier reduces the risks that these bad actors expose other users to on the platform, enhancing overall security.. Users can rest assured that Binance is proactively working in their best interest.
2. Enhanced Reputation With Multiple Stakeholders, Including Regulators
Once we are past the initial hurdles of mandatory KYC, all users will benefit from increased security.
But beyond our users, we also have to work well with regulators and institutions around the world. Sufficient KYC processes help us ensure a smoother working relationship with banks, payment providers and other partners in the wider financial sector, allowing for more innovation and cooperation in the future.
3. Compliance With Global Standards Bring More Opportunities for Crypto Adoption
While many discussions about KYC and AML are focused on regulatory compliance, the most important thing that these processes bring is the trust and assurance that a crypto exchange can operate safely at a global level. With the trust of regulators and a regulatory framework that supports innovation, it enables greater crypto adoption and the exploration of real-life use cases supported by compliant new products and services that will help grow the freedom of money for everyone.
At the root of Binance’s commitment to implementing stronger KYC and AML policies is our core value of putting users first. By getting to know our users better, we can better serve them, through enhanced security and the increased opportunities that come from wider icrypto adoption.
For more information on the updates to our global KYC requirements, please visit:
(Announcement) Updates to Binance Services