Since the FTX scandal, Binance, the largest cryptocurrency exchange in the world, has made significant efforts to be an industry leader in transparency. However, a brand-new report asserts that users are being assisted by insiders at Binance in circumventing security measures.
As per a CNBC examination, representatives and volunteers at Binance have supposedly been helping clients in China to undermine the trade’s Realize Your Client Controls (KYC).
More than 220,000 users were registered in Binance’s official Chinese-language chat rooms, according to the report. Users may be able to access shared messages there by circumventing the KYC, residency, and verification protocols of the exchange, according to reports.
These messages are said to have come from accounts belonging to Binance employees or trained volunteers who go by the name “Angels.”
Forging bank documents, attesting false addresses, and other straightforward system manipulations were among the shared methods. It is said that a spokesperson for Binance stated:
“We have taken action against employees who may have violated our internal policies, such as improperly soliciting or making recommendations that are not allowed or in accordance with our standards,” the statement reads.
At the time of this writing, Changpeng Zhao, one of Binance’s co-founders and frequent social media users, has not provided any feedback. Zhao previously voiced his disapproval of rumors circulated on the Chinese WeChat platform and took to Twitter.
In response to NFTWatcher, a spokesperson for Binance stated that the company is beginning an internal investigation into the KYC rumors.
This improvement surfaces while China keeps on carrying out a severe prohibition on digital forms of money, which started in 2021, with crypto trades banned in 2017. If found, Chinese users who use Binance without following the KYC requirements could be penalized.
Although regulators have not moved, some have urged the Chinese government to reconsider its crypto ban.
In the meantime, plans for a digital yuan, a currency issued by China’s central bank, are moving forward apace. Adoption efforts have recently received millions of dollars.