Binance Employees Accused of Teaching 220,000 Users to Bypass KYC Requirements in China
Binance, one of the world’s largest cryptocurrency exchanges, is facing scrutiny over its KYC (know your customer) and AML (anti-money laundering) efforts following revelations of employee misconduct.
According to a report by CNBC, Binance employees and ambassadors shared techniques to bypass the verification system, including falsifying bank documents and providing false addresses. The report stated that some of the shared skills involved simple manipulations of the Binance system.
As per CNBC’s report, the employees, ambassadors, and customers also shared video guides and documents showing how to fake residency to get a Binance debit card. This makes converting Binance’s cryptocurrencies as easy as a regular payment account. CNBC’s report stated that the two groups collectively have more than 220,000 users.
The revelations call into question the effectiveness of Binance’s KYC and AML efforts, according to CNBC. Financial regulatory experts are concerned that Binance’s efforts could be too easily thwarted. Binance’s spokesperson acknowledged the issue and stated that action had been taken against employees who may have violated internal policies.
Binance has a strict policy that requires all users to provide their country of residence and personally identifiable information and pass KYC. The company prohibits its employees from suggesting or assisting users to circumvent local laws and regulatory policies. Violations of these policies are subject to immediate dismissal or audit.
The revelations raise concerns about the effectiveness of Binance’s KYC and AML efforts, which are critical to preventing money laundering and other illicit activities. Binance’s response to the revelations will be closely watched by regulators and industry observers alike.
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