Top crypto exchange Binance is reportedly maintaining weak know-your-customer (KYC) compliance standards despite warnings from senior figures at the company, according to Reuters.
In a new special report, the news service breaks down the exchange’s alleged regulatory shiftiness, zeroing in Binance’s “weak” KYC checks, which are designed to prevent money laundering.
The article, based on “dozens of interviews with former senior employees of Binance, advisers and business partners,” as well hundreds of documents, also alleges that Binance has evaded questions about where its main online exchange is based.
In July, Binance CEO Changpeng Zhao said he had decided to move Binance away from its decentralized setup in an effort to appease regulators and win licensing approval amid crackdowns in several jurisdictions, including the US, Hong Kong, Japan and Singapore. The company has reportedly expressed some interest in Ireland, though to what degree remains unclear.
An internal company document indicates that Binance also didn’t take recommendations from its own compliance department and continued to recruit customers in Russia, Ukraine and five other countries deemed to be subject to “extreme” money-laundering risk, Reuters reports.
Binance didn’t respond to detailed questions from Reuters, but the exchange did provide the following quote:
“As the leading cryptocurrency and blockchain ecosystem, we are both leading and investing in the future technologies and legislation that will set the crypto industry on the road to becoming a well-regulated, secure industry.”
A Binance spokesperson also claimed Reuters’ information was “wildly outdated and – in several places – flatly incorrect,” but the spokesperson didn’t go into details.
Changpeng Zhao says on Twitter,
“FUD [Fear, uncertainty, doubt]. Journalists talking to people who were let go from Binance and partners that didn’t work out trying to smear us.
We are focused on anti-money laundering, transparent and welcome regulation. Action speaks louder than words. Thank you for your unwavering support!”
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