Binance employees trained users to circumvent KYC and AML rules (report) – Crypto News Today

On March 23, CNBC reported that a group of Binance angels shared techniques allowing users to bypass the platform’s KYC, residency, and verification systems.

CNBC confirmed the information by examining hundreds of messages posted on a Discord server and Telegram group controlled and operated by Binance, which apparently operated from 2021 to March 2023.

Crypto is banned in China, but Binance employees and volunteers tell people how to get around the ban

— CNBC (@CNBC) March 24, 2023

KYC? Which KYC?

According to CNBC, a number of Binance employees and “angels” (volunteers trained by the exchange to promote its use) have provided video guides and tutorials showing the steps users need to take to forge bank documents. and provide fake addresses when registering on the platform.

Employees even demonstrated techniques of forging their country of residence to obtain Binance debit cards.

“A person using the pseudonym Yaya and identifying himself as a Binance employee told him to activate his VPN and register as a Taiwanese resident, then revert his citizenship to China. The employee also suggested avoid using VPN nodes in the United States, Singapore, and Hong Kong.

The report also revealed that many users in China have been able to access Binance’s services despite the country’s ban on cryptocurrency exchanges since 2017 and the use of digital assets since 2021.

Binance is investigating the report

CNBC said that “techniques shared with and between clients also call into question the effectiveness of Binance’s anti-money laundering efforts,” questioning the exchange’s ability to ensure its clients don’t engage. not engage in illegal money laundering or terrorist financing activities.

Similarly, several regulatory experts, such as Sultan Meghji, a professor and former director of innovation at the FDIC, have expressed concerns about Binance’s ability to comply with KYC and AML regulations. They said such reports raise regulatory concerns about the platform, as it could enable transactions by terrorists or criminals from North Korea or Russia.

“If I had an eight out of 10 concern about Binance from a regulatory perspective and a national security perspective, that brings it to 10 out of 10. […] I’m thinking explicitly of the national security implications of how terrorists, criminals, money launderers, cyber people in North Korea, Russian oligarchs, etc., could use this to gain access to this infrastructure.

For his part, Jim Richards, Head of Anti-Money Laundering at Wells Fargo, pointed out that “Binance’s techniques for circumventing KYC checks could have implications beyond China”, precisely because the exchange could silently support the operations of other sanctioned countries.

According to a Binance spokesperson, the exchange has already taken action against employees who may have violated the company’s internal policies, made prohibited recommendations and gone against its rules. Employees who violate these policies are subject to audits and may be immediately terminated.