Hear from CZ: Our Approach To User Protection and Proactive Compliance
Source: The Daily Hodl. For more information about Binance's commitment to user protection, click here.
Four years ago, we launched Binance with a simple yet enduring vision: to increase the freedom of money for people around the world. Our approach was simple: to focus unwaveringly on our users and always act in their best interests. This user-focused approach resonated with a diverse and global audience, giving us a chance to build one of the industry’s largest and most passionate crypto communities.
Much has changed since we first started our journey. Today’s crypto industry is no longer the nascent field that primarily attracted tech-savvy first adopters and speculative participants. Traditional institutions and longtime holdouts are now exploring or offering crypto services of their own. Adoption is climbing all over the world, powered by a combination of bull markets and innovation. Despite these developments, our goals at Binance remain the same: We want to help bring crypto to more people around the world.
Today’s compliance and regulatory landscape marks a historic moment for the blockchain and crypto industry. Like all innovative industries that have come before it, from manufacturing and pharmaceuticals to Big Tech and ridesharing, the blockchain and crypto industry is now reaching a critical new stage of development.
We see the regulatory process as an amazing opportunity for proactive companies like Binance to pave the way forward for the industry. We firmly believe that by working alongside regulators and policymakers to develop clear regulatory and legal frameworks, engaging in active self-regulation and putting our users first by protecting their interests, we can help welcome the next billion users to the world of crypto.
I would like to take this opportunity to share some of the active steps we are taking to shape our robust compliance program and protect our users.
Mastering Crypto Compliance
Compliance and cooperation go hand-in-hand. In many ways, they resemble two sides of the same coin: you can’t have one without the other.
The process of compliance requires proactive players within the industry to come together with regulators and policymakers to build rules and operating frameworks, organize the industry’s values and create a foundation for sustainable growth.
In this regard, we have committed to the following:
Growing Our Compliance Team: To help maintain compliance in operating jurisdictions around the world, we grew our compliance team by 500% in 2021 so far, and plan to double the team’s size by the end of the year.
Bringing on Strategic Advisors: We onboarded key compliance advisors, including appointing Rick McDonell and Josée Nadeau, former FATF Executive Secretary and Head of the Canadian delegation respectively. In addition, we brought on Max Baucus, former United States Senator and ambassador to China, to provide high-level regulatory guidance.
Practicing Self-Regulation: We hold ourselves to the highest standards in line with our commitment to compliance. This month, we proactively restricted derivatives product offerings to Hong Kong users in order to help create a more sustainable blockchain ecosystem.
Localizing Operations & Businesses: We aim to be regulated and apply for crypto exchange-related operating licenses in more local jurisdictions than any other blockchain ecosystem. From Binance.US to Binance Singapore, we work to maintain fully regulated entities using the Binance brand.
Deploying Industry Leading RegTech Tools: To ensure compliance with global “travel rule” regulations, Binance was one the first exchanges to deploy CipherTrace Traveler, a regulatory technology tool designed to, “help Binance continue to meet the highest standards for global Anti-Money Laundering compliance”, according to CiperTrace CEO Dave Jevans. CipherTrace Traveler joins several other KYC and RegTech solutions in our compliance arsenal.
Maintaining Know-Your-Customer (KYC) Compliance: We have proactively furthered our industry-leading KYC efforts by expanding global KYC requirements to further user protection and provide a safe crypto environment.
Finding New Ways to Protect Users
Alongside our strict compliance initiatives, we find additional ways to protect users to ensure they have the crypto experience they deserve. I’m proud to say that from the beginning, we have always taken our responsibility as an ecosystem provider seriously when it comes to safeguarding the interests of our users.
Combating Cybercrimes Worldwide: Binance takes unilateral action to prevent bad actors from using our platform, including working with local law enforcement to take down cybercriminal groups. In addition, we work with private sector chain analytics companies to proactively identify and offboard suspicious accounts.
Investing in User Education: We dedicate resources to create free educational content in order to increase crypto access and literacy for users on and off our ecosystem, from our comprehensive Support Center that contains hundreds of tutorials to Binance Academy, our free education platform.
Launching an Industry-First Responsible Trading Program: Binance is the first and only exchange to implement technical and educational measures to encourage users to trade responsibly. From anti-addiction notices to “cooling-off” suspension features, we actively remind users to exercise caution when trading.
Instituting a SAFU Emergency Insurance Fund: We allocate 10% of all trading fees received into the Secure Asset Fund for Users (SAFU) to protect users and their funds in emergency scenarios.
Providing User-First Security Tools: To create a safe and secure environment for users, we safeguard our platform with user-accessible security tools like hardware, app-based, SMS and email Two-Factor Authentication methods, stringent password requirements, withdrawal address management tools, security alerts in the case of suspicious activity and more.
These are just a few of our ongoing initiatives we’re working on, as we uphold our commitment to regulatory compliance and user protection. As I’ve said in my previous open letter, we at Binance are looking forward to helping generate sustainable growth for the industry. By continuing our work with regulators and policymakers, and making every effort to protect our users and put their interests first, I’m confident we will rise to the occasion and meet the moment, helping increase the freedom of money for more people around the world.
To learn more about our commitment to user protection, including our latest security and compliance efforts, visit our User Protection page.
CZ, Binance CEO and Founder