Binance has implemented a new policy to strengthen its Know-Your-Customer (KYC) and Anti-Money Laundering (AML) activities.
The decision comes as regulators tighten their grip on the exchange and crypto business. As a result, the exchange implemented a new user verification procedure to safeguard assets and institutions against illegal activities.
The adoption of a KYC strategy has been a popular practice among
Crypto businesses have started requiring KYC checks for their users to improve their compatibility with the 21st-century trend and match with financial authorities’ rules.
It has become a critical component that exchanges must adhere to raise their profile and retain their position in the market.
Another US crypto exchange, Kraken, has announced stricter KYC requirements for margin traders in the nation. On Friday, the Binance exchange stated that user verification had enhanced user protection.
The KYC protection mechanism is comparable to how financial service providers are mandated to conduct KYC checks in their institutions worldwide to prevent illicit activity.
It’s reasonable to assume that as a company that handles huge assets on behalf of its consumers, the world’s largest exchange is attempting to be proactive.
As a result, an intermediate verification process must be completed before customers use Binance services such as product offering, deposits, trades, and withdrawals.
Firms that manage large assets on their clients require this approach to know who their clients do business with. This information safeguards both the institution and its assets.
How will a better KYC check benefit the Binance exchange?
Binance KYC’s proactive action, according to reports, is a step toward improving the company’s image with banks, financial institutions, and other partners.
The action would give banks and other partners more confidence that the exchange can function safely. In addition, KYC checks, such as the user’s ID document and country of origin, are thought to discourage would-be money launderers and other criminal elements.