Since the FTX debacle, Binance, the biggest cryptocurrency exchange in the world, has made significant efforts to set the standard for industry openness. A recent revelation, however, asserts that Binance insiders are assisting users in getting beyond security measures.
A CNBC investigation purportedly found that Binance staff members and volunteers helped Chinese clients circumvent the platform’s know-your-customer (KYC) security measures.
The official Chinese-language chatroom for Binance, which has more than 220,000 registered users, is mentioned in the study. Users are allegedly able to read shared messages there using tricks to get over KYC measures, stay, and confirm the trade.
These communications purportedly came from accounts utilizing the “angels” address that were recognized as Binance staff or skilled volunteers.
Forging bank notes, fabricating address proof, and straightforward system manipulation were common techniques. In response, a representative for Binance said:
“WE HAVE ACTIONED AGAINST EMPLOYEES WHO MAY HAVE VIOLATED OUR INTERNAL POLICIES, INCLUDING INCORRECTLY REQUESTING OR MAKING RECOMMENDATIONS THAT ARE NOT PERMITTED OR ALIGN WITH OUR STANDARDS,” the statement reads.
Changpeng Zhao, a co-founder of Binance and a frequent user of social media, has not yet reacted. Zhao earlier denounced the rumors spreading on the Chinese social media site WeChat on Twitter.
This event occurs as China continues to enforce its tight prohibition on cryptocurrencies, which was put into effect in 2021. Coin exchanges have also been outlawed since 2017. There may be consequences for Chinese users who circumvent KYC requirements to access Binance.
Some people have urged the Chinese government to reevaluate its prohibition on cryptocurrencies.