Binance Cryptographic Exchange Strengthens Money Laundering Controls As Regulatory Pressure Increases

FRANKFURT, Aug. 20 (Reuters) – Binance cryptocurrency exchange said on Friday it would demand tighter fund controls on customers to bolster anti-money laundering efforts, with immediate effect, a move that comes after weeks of pressure from regulators worldwide.

Binance, the world’s largest cryptocurrency platform, has faced warnings and business brakes from financial watchdogs from Britain and Germany to Japan, concerned about the use of cryptography in money laundering and money laundering. risks to consumers.

The stock exchange, whose holding company is registered in the Cayman Islands, has reduced its product offerings and said it wants to improve relations with regulators.

U.S. Treasury Secretary Janet Yellen and European Central Bank President Christine Lagarde were among those who expressed concerns this year about money laundering in cryptography, while other regulators are especially concerned about Binance .

The Dutch central bank said on Monday that the platform, which processed one-off operations worth $ 455 million in July, did not comply with its anti-money laundering and anti-terrorist financing laws.

Binance users will need to complete a verification process to access their products and services, he said on his website. Those who have not done so will only be able to withdraw funds, cancel orders and close positions.

The move represents a major change for Binance.

Until now, it only requested identification checks for users looking for higher trading limits. Now, users must provide an ID card, a driver’s license or a passport, he said.

Standards vary by exchange. Many large platforms, including Coinbase Global Inc (COIN.O) and Gemini, also require users to submit identification documents, but Kraken, another US exchange, only requires personal information for limited access to transactions.

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Binance CEO Changpeng Zhao, a Canadian known by his nickname “CZ”, said in a tweet that he linked to the Binance ads that “actions speak louder than words.”

“Our goal is to work more collaboratively with policymakers to improve global standards and discourage bad actors,” he added in a separate statement.

Binance said this week that it had appointed a former U.S. Treasury criminal investigator as a global money laundering officer.

Still, some lawyers were skeptical about whether Friday’s move to tighten controls would appease regulators.

Financial watchdogs should know which of Binance’s local entities run the customer knowledge process to verify and verify compliance with local laws, said Alireza Siadat, a partner at Frankfurt’s Annerton law firm.

“It’s a good marketing statement, but from a regulators’ perspective, that’s not enough, ”he said.

“Because they do it voluntarily, regulators don’t know if they have the authority to oversee identity control and no one can check if it’s doing it properly.”

Binance’s corporate structure is opaque, although its company is registered in the Cayman Islands, according to British court documents and the Malaysian securities watchdog.

Report by Krisztian Sandor in Frankfurt and Tom Wilson in London; written by Tom Wilson Edited by Rachel Armstrong and Elaine Hardcastle

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