• Binance, the world’s largest cryptocurrency exchange, is allegedly helping customers in China bypass KYC controls.
• A CNBC investigation found that employees and volunteers at Binance are aiding customers in China to subvert security protocols.
• Binance has responded by launching an internal investigation into the matter.
Binance Allegedly Helping Customers Bypass KYC Controls
A new investigation claims that users around the world are manipulating Binance’s billion-dollar security protocols through inside help. According to a CNBC investigation, employees and volunteers at Binance have allegedly been aiding customers in China to subvert the exchange’s Know Your Customer Controls (KYC). The report points to Binance’s official Chinese-language chat rooms, in which more than 220,000 users were registered. There, users are reportedly able to access shared messages with techniques to bypass the exchange’s KYC, residency and verification protocols.
Techniques Used To Bypass Security Protocols
The techniques used by these insiders include forging bank papers and attesting false addresses as well as other simple system manipulations. A spokesperson for Binance was quoted as saying “We have taken action against employees who may have violated our internal policies, including wrongly soliciting or making recommendations that are not allowed or in line with our standards.”
China’s Ban On Cryptocurrencies
This development surfaces while China continues to implement a strict ban on cryptocurrencies, which began in 2021 with crypto exchanges outlawed in 2017. Chinese users evading KYC rules to access Binance could face repercussions if uncovered. Some have called on the Chinese government to reconsider the crypto ban though regulators have not budged so far.
Binace Investigating The Matter Internally
Binance has responded by launching an internal investigation into the matter regarding their alleged help of customers bypassing KYC controls. This comes after co-founder of Binance Changpeng Zhao denounced rumors spread on Chinese WeChat platform earlier this month..
Conclusion
This new report raises serious questions about how secure cryptocurrency exchanges truly are, even when they claim transparency and security protocol enforcement as core values of their business model. It further underscores how difficult it can be for governments like China’s Communist Party leaders to control digital currency flows within their borders despite stringent bans on trading activities related to crypto assets such as Bitcoin and Ethereum