Binance, the world’s largest cryptocurrency exchange by adjusted trading volume, is implementing stronger know-your-customer (KYC) and anti-money laundering (AML) regulations to ensure data security and compliance across their global operations.
Following the launch of Bitcoin Lite in Australia, Binance announced today a new partnership with Medici Ventures portfolio firm, IdentityMind. This collaboration is part of a joint mission to help raise the blockchain industry’s standards by improving existing data protection and compliance measures.
The partnership between Binance and IdentityMind further strengthens our compliance capabilities and our commitment to re-invest in the blockchain ecosystem and grow it, said Samuel Lim, Chief Compliance Officer of Binance. We continue to evolve and enhance security systems while adhering to regulatory mandates in the countries we operate in. The goal is to foster greater trust among financial institutions worldwide.”
While Binance also partners with Chainalysis and Refinitiv, the company chose to collaborate with IdentityMind particularly because the platform enables digital currency exchanges to comply with KYC and AML regulations worldwide. This was necessary for Binance, as its users come from over 190 countries and regions. Moreover, Binance is capable of processing more than 1.4 million orders per second, making it the largest crypto exchange by trade volume in the world.
With Binance’s tremendous trading volumes and its rapid expansion plans, compliance is naturally more challenging, especially in this fast-changing market, said Garrett Gafke, President and CEO of IdentityMind. 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.”
According to IdentityMind’s director of product management, Neal Reiter, the company is specifically helping Binance identify a user’s “digital identity” at a global level.
From a KYC perspective, Binance has a partnership with Refinitiv, which is a know-your-customer services provider company affiliated with Thomson Reuters. Binance also collaborates with Chainalysis, which is a blockchain explorer tool. However, IdentityMind provides digital identity, which is a combination of looking at a user’s physical and digital attributes. For instance, we look at a user’s physical address as well as their Bitcoin address, knowing that both of these won’t change simultaneously.”
A Blockchain Ecosystem Built On Trust
Through Binance’s multiple KYC/AML partnerships, the crypto exchange aims to foster trust among financial institutions globally. Yet while Binance continues to implement greater compliance measures, some users remain skeptical, arguing that KYC and AML are too centralized for blockchain networks. Data privacy also becomes questionable with such measures in place.
According to Lim, however, it is possible for data privacy and KYC to coexist.
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. These KYC/AML initiatives are part of Binance team’s ongoing efforts to provide an enjoyable trading experience without sacrificing user privacy. Binance respects user privacy and will not collect, disclose, or use KYC information unless for legitimate business purposes.”
Furthermore, Reiter from IdentityMind points out that Binance only sends encrypted data to their platform.
There is a difference between security privacy and AML. Binance has privacy by design, so it’s extremely important that their customer’s data is both secure and private. We actually don’t see any information from Binance since they are sending encrypted data to the IdentityMind platform. I think it’s refreshing to see that Binance is trying to incorporate every service they can to provide for an extremely robust platform.”
Lim also notes that Binance operates with the highest of standards when it comes to KYC and AML measures.
“Binance operates with the highest ethical, professional and compliant standards, while protecting user privacy and asset security. We recognize our responsibility to ensure the integrity of our platform and build greater trust in the industry,” said Lim.