KYC Now Compulsory For All Binance Users
The world’s largest cryptocurrency exchange, Binance, has made KYC compulsory for all users of its platform. KYC or “know your customer” is a regulatory practice carried out by companies that mandates clients to verify their identities. This latest development comes amid increasing calls for regulations to the crypto industry.
Binance Founder and CEO Changpeng Zhao also known as CZ has stated that security is one of the core values of the Binance team. He has in the past stated his willingness to comply with regulatory bodies to increase security and improve user experience and this seems to be proof of that.
Users Will Be Restricted Until Verification Is Completed
The notice released on Friday morning was classified under Binance’s updated policy. The new policy states that all new users to the Binance platform will be made to complete mandatory “intermediate verification” to access its services. The platform has two levels of verification requiring differing amounts of information about its customers. Basic verification requires just the name and location of the customer. It previously allowed users access to trading services on the platform. Intermediate verification which is the level now being enforced requires users to upload photos of themselves along with valid government-issued ID.
While the policy first talks about new users only, further reading reveals that existing users are not exempt from it. It states that existing users will be restricted until they complete their intermediate verification. Although the majority of the trading privileges they previously enjoyed will be temporarily unavailable, existing users will still be able to withdraw funds from their account, close existing positions and cancel orders. This is commendable as it seems that rather than withholding user funds to enforce its new policy, Binance is giving its users that are unwilling to complete verification the opportunity to stop using the platform and walk away with their money. The new policy is expected to be enforced in phases over two months to “minimize user-experience disruption”.
Binance Users React To New Policy
Binance’s new policy seems to have caused differing opinions. Some users are up in arms about mandatory verification being enforced on the platform after years of being able to trade without it. This is understandable as part of the allure of cryptocurrency for some people is the ability to make financial transactions while remaining anonymous. They see it as a step in the wrong direction as this will enable governments to freeze their funds on a whim if need be. Others are a little more optimistic. One Twitter user stated that regulation like this is a compulsory step on the road to the mass adoption of cryptocurrency.
CZ himself has previously been open about his willingness to increase regulation if it would lead to mass adoption and enhance security. Regardless of this, he has shown understanding for those unwilling to comply with Binance’s new policy wishing one Twitter user angry at the new developments “best of luck”.
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