Binance, the world's biggest platform, has been under
pressure in recent months from regulators across the world, who are concerned
over the potential for crypto to be used to launder money and the risks to
consumers from volatile crypto trading.
The exchange, whose holding company is registered in the
Cayman Islands, has scaled back its product offerings, including leveraged
trading and tokens linked to equities, and has said it wants to improve
relations with regulators.
The potential for cryptocurrency exchanges to launder money
has long worried regulators, with US Treasury Secretary Janet Yellen and
European Central Bank President Christine Lagarde among those this year to
voice concerns.
The Dutch central bank on Monday said Binance was not in
compliance with its anti-money laundering and anti-terrorist financing laws.
Binance said on its website that users would have to
complete a verification process to access its products and services. Those who
have not done so will only be able to withdraw funds, cancel orders and close
positions.
Until now, document-based ID checks at Binance were only
required for users who wanted higher limits on trading. Users will now have to
upload an ID card, driver's licence or passport to prove their identity,
Binance said.
"This will further enhance user protection and combat
financial crime," it said of the move.
Binance CEO Changpeng Zhao, a Canadian known by his nickname
"CZ" tweeted a link to the Binance announcement, saying "actions
speak louder than words".
Steps taken by crypto exchanges to make identity and
background checks remain varied, with some demanding full documentation and
others allowing users to sign up for accounts with as little as an email
address.
Binance spot trading volumes in July were USD 455 million,
down almost a third from a month earlier but still No.1 globally, according to
data from CryptoCompare.
Binance's corporate structure is opaque though its holding
company is registered in the Cayman Islands, according to British court
documents and Malaysia's securities watchdog.
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