By
Chimamanda U. Martha
April 25th, 2024
With a view to ensuring data security and compliance across its global operations, Binance is going to implement stronger KYC and AML regulations.
As it has been revealed, Binance that is widely known as the largest crypto exchange in the world is actively working on enhancing compliance and data security. It is planned to achieve this goal via a new partnership with Medici Ventures portfolio firm IdentityMind.
New Partnership
In the announcement recently made by IdentityMind the collaboration established between two companies is aimed at increasing the existing level of data protection and strengthening currently applied compliance measures across Binance’s global operations.
This cooperation is considered to be one of the elements of a joint mission that is implemented to raise the blockchain industry’s standards of data protection and compliance.
IdentityMind offers cryptocurrency exchanges an opportunity to use services of a “real-time” platform to comply with know-your-customer (KYC) and anti-money laundering (AML) regulations all over the world. These steps help them to prevent fraud and other forms of wrongdoings. The startup’s services cover such processes and procedures as client registration, transaction tracking, and case management solution.
Speaking about their new partnership with Binance Garrett Gafke, IdentityMind CEO and president, noted:
“Our risk and compliance platform powered by a patented digital identities engine meet the scale demands of Binance’s global operations while providing a highly accurate system for assessing any global risk factors from outside entities for transactions.”
“We are excited to provide the necessary tools that will allow them to continue growing and serving more users around the world in a secure and compliant manner,” added he.
Binance and Compliance Measures
This new partnership is a sign of serious changes in Binance’s stance towards such issues as compliance. Earlier it used to avoid too strict compliance measures though they were widely accepted by other leading crypto exchanges including Coinbase, for example.
Typically, KYC processes applied by Binance have been considered to be rather mild especially compared to the industry’s ones. To open a trading account with Binance, you need to have only an email address which allows you to remain practically anonymous. Nevertheless, in such a situation it is impossible to detect money laundering and market manipulation.
Now Binance is trying to ensure trust among financial institutions globally. But some users still suppose that enhanced KYC and AML may be a sign of centralization which is inappropriate for blockchain networks. Bearing this idea in mind, Samuel Lim, Chief Compliance Officer of Binance, also commented on their new partnership:
“Binance is thoughtful in deciding what specific KYC information to collect. The goal is to ensure that recourse is available to victims of cryptocurrency thefts and to give all Binance users the peace of mind that their funds won’t be contaminated by those from illicit sources.”
But it’s worth mentioning that the newly established cooperation with IdentityMind is not the first step of Binance towards raising its compliance measures.
A little bit less than half a year ago, the crypto exchange announced its partnership with Chainalysis, a well-known software provider. The partnership is aimed at conducting real-time monitoring of crypto transactions in order to detect fraud and illegal activities
Moreover, Refinitiv, which is a former division of Thomson Reuters, is also one of Binance’s partners. It provides the exchange platform with automated KYC solutions.