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Binance loses 3% of clients after KYC

Thu 18 Nov 2021 ▪ 13h46 ▪ 3 min read — by Susan McCormack

Bloomberg asked Binance CEO Changpeng “CZ” Zhao about the recently published “fundamental rights”. Zhao admitted that Binance had lost about 3% of its customers due to KYC.

Time to say goodbye

The reporter asked CZ whether users had left as the exchange tightened compliance.

“We feel that being compliant will allow more users to use us. Most people do feel more comfortable using a licensed exchange. Most people – 96%, 97% of users – go through KYC. We only lose 3% of the users,” Binance CEO replied.

Zhao added that Binance had chosen “to go with full compliance, full mandatory KYC for global users” as safety was always of the first priority.

Nota bene

KYC (Know Your Customer) is a set of standards used within the investment and financial services industry to verify customers, their risk profiles, and financial profiles.

When asked whether the exchange had had success at winning over regulators, Zhao said that they had had “many interactions where the regulators were sceptical at first”, but as the talks proceeded and the parties “communicated more and more, the attitudes changed.”

Since 20th August 2021 KYC is mandatory for all existing and new Binance users.

On 17th September 2021, Binance made a post, stating that “Binance implemented a new requirement for users to be ‘Verified’ to enhance its Know Your Customer (KYC) and Anti-Money Laundering (AML) efforts, and further user protection.”

SQUID coin scam

CZ has also commented on the Squid Game token (SQUID) scam.

After soaring by more than 230,000% and hitting the $2,800 mark, SQUID collapsed and became worth less than a cent.

“If the project teams hide their tracks very efficiently, it may take a long time to discover who they are. That’s one of the downsides of decentralised,” said Zhao.

He added that the scammers “may be anywhere in the world” and that “it may take a very concerted effort to actually find them.”

Education is a key

CZ has stressed that the crypto community should be educated as “education is the best preventive measure”.

“it’s very important for users to understand that everything they do, everything in this world has risks. You’ve just got to understand what those risks are and deal with it accordingly,” Zhao said.

Recently, Binance has announced its plans to open a headquarters in France. The exchange promises to disclose the details in the near future.

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Susan McCormack avatar
Susan McCormack

How many crypto nerds does it take to fork an altcoin? I may be a failed comedian, but crypto is no joke! I want to share my knowledge and help others to see the bright future ahead. #buybitcoin

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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