The Know-Your-Customer policy is a major regulation that crypto firms must comply with for them to continue gaining approval from the mainstream and ensure compliance with regulators. Kraken recently announced that there would be a tighter KYC restriction for margin traders in the United States, and also, Binance is looking forward to strengthening its user protection through user verification enforcement.
Just like every financial service provider is expected by global regulators to established KYC policies as a means of curbing illicit acts, Binance is becoming as proactive as it could be as a crypto exchange that manages users’ assets.
An intermediate verification step will now be required for users on Binance to access its product offerings and services, including trading, deposits, and withdrawals. This very step is essential for the institution that manages assets on behalf of its users to have an understanding of who they are and what they are doing. The essence of this knowledge is to protect both the assets and the institution.
Binance KYC Improvement for Profile Improvement
Binance has seen this step as a way of boosting its reputation with its partners and banks by increasing the assurance for safe operation. The initial barrier that this intermediate verification that requests the User’s government-issued ID, country of origin, among other things, will pose is a deterrent for would-be money launderers and other criminals looking to use crypto.
Binance announced a new Head of Money Laundering Reporting, Greg Monahan, in n effort to increase the international investigation and the anti-money laundering of Binance.
The Wider Benefit Attached to Crypto
It is quite helpful to see the user verification of Binance as a step to a massive positive direction of the whole crypto space. As more mainstream users and more fiat currency are flowing into the crypto space, the ears of the regulators are perked up, and this caused them to enforce all centralized crypto platforms that manage digital assets to fight against illegal funds passing through their system.
Thus, exchange compliance will do the crypto industry a lot of good by increasing the trust from users and the eventual adoption of crypto for payments and purchases. Earlier in January 2021, a crypto exchange, BitMEX, imposed the same regulations on its users after the American authorities launched legal action against it.