Binance staff assists Chinese consumers in evading KYC requirements

After the FTX crisis, Binance, the biggest cryptocurrency exchange in the world, has worked hard to establish itself as an industry leader in transparency. Yet according to a recent revelation, Binance employees are reportedly assisting users in getting over security measures.

In 2021, the central bank of China proclaimed all cryptocurrency transactions to be unlawful, thereby banning foreign cryptocurrency exchanges from the country.

Binance’s security is being manipulated by users worldwide.

The history of Binance’s official chatrooms on Telegram and Discord, however, has been covered in length by CNBC. The publication discovered accounts that seemed to be associated with Binance personnel (or Binance-trained volunteers known as “Angels”) who have instructed users in China on how to get around know-your-customer (KYC) checks and other customer verification processes.

These strategies comprised fabricated papers, such as counterfeit bank statements and incorrect addresses, according to CNBC.

Employees, volunteers, and other customers allegedly offered information, including video tutorials, to mainland Chinese citizens demonstrating how to falsely claim their country of residency to use the exchange’s debit card.

Chinese authorities have frequently advised citizens to stay away from the digital asset market, along with reports of crackdowns on local and foreign crypto exchanges operating on the mainland.

Binance and prohibited regions

In 2017, China forbade cryptocurrency exchanges from operating within its borders and took steps to curtail cryptocurrency-related activity by directing financial institutions to play a more active role in sorting out transactions and driving out crypto mining operations.

Since 2017, when regional cryptocurrency exchanges were instructed to shut down, Binance has been restricted in China. After the 2021 edict, Binance informed that it did not operate exchanges in China and that users there could not download the Binance app.

Yet, people in the nation have persisted in finding ways to conduct over-the-counter or peer-to-peer transactions to exchange bitcoin and other digital currencies. Several Chinese users were able to access foreign exchanges by utilizing VPNs. Beijing’s 2021 prohibition on cryptocurrency transactions and services provided by foreign exchanges was directed at closing these gaps.

Binance is working with legislators across the world to create rules that would support the growth of the cryptocurrency industry.

I am Vishal. I post articles about the cryptocurrency markets. I'm pursuing a BBA degree. My home is in Navi Mumbai, Maharashtra.I'm constantly interested in new advancements in this industry and I learn something new about it every day. I would love to share such information with you all.

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