In a sudden twist, Binance has requested all of its users to immediately complete the KYC procedure and verify their identities, or the exchange will be forced to limit its services to users who do not comply. The move, which caught many by surprise, comes after the world’s largest exchange ended up facing numerous regulatory issues in jurisdictions across the globe.
Binance’s regulatory issues cause the exchange to change its ways
As many may remember, Binance has been facing accusations from numerous countries’ regulators that it is operating unlicensed business. The prime example of this used to be its tokenized stocks offerings, which the exchange eventually had to remove. Not only did the regulators point out that it lacks the licenses to offer such products, but some of the major banks in different jurisdictions decided to stop allowing payments to the platform.
One example of this is Barclays, the major UK bank which simply announced that users will no longer be allowed to send funds to Binance, for their own protection. While the move caused a lot of rage among the UK users, who said that the bank had no right to decide what they will do with their money, the ban remained.
Of course, Binance soon responded to the growing pile of accusations by saying that it grew a lot in a very short time, and as a result of that, it did make mistakes. However, it claimed that it all happened due to oversights, rather than the intention to purposefully bypass its responsibilities or the laws.
Now, the exchange is looking to fix its mistakes and improve its business, and publicly requesting that everyone has to complete KYC is the next step. Binance also promised to expand its compliance team in order to ensure that there will be no more similar oversights.
Binance announces the plan for new and existing users
The statement that the exchange published simply said that, effective immediately, all new users are required to complete verification in order to access Binance products and service offerings. That includes crypto deposits, withdrawals, and trades. Of course, Binance has had KYC requirements for a long time now, although only for users who traded higher amounts of money.
For those who only handled a few hundreds of dollars per day, the exchange did not insist on completing verification, likely believing that such low amounts would not be harmful or useful for anyone trying to cheat the system. But, the laws of pretty much all jurisdictions that it covers are quite clear, and there are no such exceptions, which is why users are now required to complete their ID verification to access even services like withdrawals, order cancellations, position close, and redemption, all of which used to be allowed even without KYC.
In addition, the existing users will be rolled out in phases, to ensure that the user experience would feel minimal disruptions. Users are encouraged to complete KYC requirements as quickly as possible. The procedure is fairly simple to do, and going through it will grant them access to all Binance products and services, as before.
Binance steps up efforts to achieve regulatory compliance
The exchange further explained that the stricter implementation of KYC and AML measures will work in investors’ and traders’ favor, protecting them against financial crimes.
Naturally, the procedure will require some time. Basic verification can be done within a single day, but verifying all documentation, including users IDs, proof of address, facial verification, and more, will require approximately three weeks, or around 20 days to review.
The move certainly signals that Binance has taken the regulators’ warnings and criticism seriously. The exchange started encouraging users to complete KYC some time ago, with the first big move being the limited withdrawal amounts. This was introduced a few weeks ago, on July 28th.
Prior to the change, users could withdraw up to 2 BTC per day. After the exchange’s intervention, however, that amount was brought down to 0.06 BTC. Now, Binance is taking the next step in achieving compliance by requiring absolutely everyone to complete KYC. Otherwise, users will no longer have access to its services, at all.