Binance Investigating Employees for Helping Chinese Customers Bypass KYC Verification

Hey Peeps!

 

According to CNBC report published on March 23rd, Binance employees have been helping Chinese customers to bypass the Know-Your-Customer (KYC) verification process needed to access the crypto exchange. 
 

China banned crypto exchanges in 2017 and then cryptocurrency trading back in 2021, but despite the bans there has not been a huge decline in Chinese crypto customers. 

The report claims that Binance employees showed customers techniques, to bypass the KYC verification process, that involved the forgery of financial documents, providing a false address, and the manipulation of the exchange's security systems.

These KYC verification processes are reportedly in place to ensure customers aren’t "engaged in illegal activity, like terrorism or fraud".
 

The former FDIC Chief Innovation Officer, Sultan Meghji, had some choice words for Binance and raised concerns about the effectiveness of KYC and anti-money-laundering efforts. 

Meghji proposed the idea that if Chinese customers were easily able to bypass the KYC processes, then what would be stopping North Korean, Russian, or Iranian customers to do the same thing. 
 

Cointelegraph spoke with a Binance spokesperson who explained that the crypto exchange has launched a company-wide investigation into the potential evasion of KYC verification, which was reportedly assisted by employees. 

 

“We have launched an investigation into employees who may have violated our internal policies including wrongly soliciting or making recommendations that are not allowed or in line with our standards.”
- Binance spokesperson

 

When Binance was pressed by CNBC for a response, Binance stated that they have "taken action against employees who may have violated our internal policies". 

This makes me think that Binance must be aware of the issue to some degree and if they are punishing specific employees then they must know who was assisting Chinese customers to bypass the laws and KYC verification. 

If Binance already took action against the employees responsible, then why would it be necessary to launch an investigation. 

I guess I am just being a bit suspicious when there is nothing there, as it should be normal for a company to investigate after an issue has been revealed. 

With that said, we will have to wait until Binance's investigation wraps up and is disclosed before we get anymore information on this. 
 

What are your thoughts on this news?

Do you think there is a potential issue for North Korea and other countries exploiting Binance in the future? 

If so, is this really a huge concern? 
 
 
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