EddieJayonCrypto
19 Mar 24
This article discusses Binance's recent move to require prime brokers to enhance their KYC protocols in order to block U.S. nationals from accessing their platform. This decision comes after Binance settled a case for $4.3 billion related to violations of sanctions and money-transmitting laws. The e...
This article discusses Binance's recent move to require prime brokers to enhance their KYC protocols in order to block U.S. nationals from accessing their platform. This decision comes after Binance settled a case for $4.3 billion related to violations of sanctions and money-transmitting laws. The exchange has been asking prime brokers to collect additional client information, such as office addresses and employee locations, to ensure compliance. Court documents have revealed that U.S. customers significantly fueled Binance's rapid growth, a practice that has been deemed illegal due to the exchange's lack of registration as a U.S. business. Despite these risks, Binance's former CEO and other officials encouraged high-value U.S. clients to conceal their connections to the U.S. through methods like using VPNs and APIs. Binance is now requiring its prime brokers to conduct enhanced Know Your Customer (KYC) work on clients, ensuring they are not serving U.S. nationals, according to a report from Bloomberg. This move comes after the exchange settled a case and pleaded guilty to breaking sanctions and money-transmitting laws, leading to a $4.3 billion settlement. The exchange has directed prime brokers like FalconX and Hidden Road to collect additional client information, including office addresses and the locations of employees and founders, along with signed attestations verifying the accuracy of the information. Despite these legal challenges, Binance has stated that it is fully committed to compliance and has transparently communicated how it assesses end users who can access the platform. This transparency aims to provide clarity to enterprises seeking to access Binance's market-leading liquidity. However, court documents have revealed that U.S. customers significantly fueled Binance's rapid growth, despite it being deemed illegal by U.S. authorities due to the exchange's lack of registration as a U.S. business. Additionally, former CEO Changpeng "CZ” Zhao and other officials have been found to encourage high-value U.S. clients to conceal their connections to the U.S. through methods such as using VPNs and APIs, despite the known risks.
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