A recent report by CNBC alleges that Binance, the world’s largest cryptocurrency exchange, has insiders who may be aiding Chinese users in bypassing its security protocols.
According to the report, Binance employees and volunteers, known as “Angels,” shared communications in Chinese-language chat rooms, describing ways to get around the exchange’s Know Your Customer (KYC), residency, and verification systems.
The messages reviewed were from accounts attributed to Binance employees or volunteers. They shared techniques such as forging bank documents, providing false addresses, and manipulating the system in other straightforward ways.
The report suggests that the techniques shared by Binance with its clients cast doubt on the efficacy of its anti-money laundering measures. Implementing KYC and anti-money laundering measures is crucial for international firms like Binance to stop clients from engaging in illegal activities like fraud or terrorism.
According to a spokesperson from Binance, the company has implemented measures against employees who have breached their internal guidelines by unlawfully soliciting or providing recommendations that do not conform to their standards.
The Binance spokesperson stated:
“We have strict policies requiring all users to pass KYC by providing us with their country of residence and other personal identification information.”
The spokesperson also noted that Binance’s employees are prohibited from suggesting or assisting users in evading their local laws and regulatory policies and any employee who violates this directive will face immediate dismissal or an audit.
Earlier this month, it was reported that Binance had attempted to hire Gary Gensler as an advisor back in 2018 with the intention of avoiding regulatory scrutiny in the United States. It’s worth noting that this plan was conceived before Gensler was appointed Chairman of the US Securities and Exchange Commission (SEC).
During his tenure as a professor at MIT, Gensler was approached by the cryptocurrency exchange in 2018 and 2019. In March 2019, Gensler met with Changpeng Zhao, the founder of Binance, in Tokyo. However, while at MIT, Gensler was approached by various private corporations seeking his advisory services, but he turned down all of these requests.
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