The major cryptocurrency exchange Binance said on Friday that it will require stricter background checks on customers to strengthen anti-money laundering efforts, effective immediately.

Binance, the world’s largest platform, has been under pressure from regulators around the world in recent months, who are concerned about the risks that cryptocurrencies may be used for money laundering and volatile cryptocurrency transactions will bring to consumers.

The exchange’s holding company is registered in the Cayman Islands and has reduced its product supply, including leveraged trading and stock-linked tokens, and expressed its desire to improve relations with regulators.

For a long time, the possibility of money laundering on cryptocurrency exchanges has been worrying regulators. This year, US Treasury Secretary Janet Yellen and European Central Bank President Christine Lagarde expressed their concerns.

The Bank of the said on Monday that Binance does not comply with its anti-money laundering and anti-terrorist financing laws.

Binance stated on its website that users must complete the verification process to access its products and services. Those who have not done so can only withdraw funds, cancel orders and close positions.

So far, only users who wish to increase the transaction limit need to perform a document-based ID on Binance. Binance said that users must now upload ID cards, driving licenses or passports to prove their identity.

“This will further strengthen user protection and combat crimes,” it said of the move.

Binance CEO Changpeng Zhao, a Canadian nicknamed “CZ”, tweeted a link to Binance announcement Say “action speaks louder than words.”

The steps taken by cryptocurrency exchanges to conduct identity and background checks still vary. Some require complete documentation, while others allow users to register for an account using only an email address.

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According to data from CryptoCompare, Binance’s spot trading volume in July was US$455 million (approximately Rs 3,384 crore), a decrease of nearly one-third from a month ago, but it was still the world’s largest.

According to British court documents and Malaysian securities regulators, Binance’s corporate structure is opaque, even though its holding company is registered in the Cayman Islands.

© Thomson Reuters 2021


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