Binance Launches In-House Investigation into KYC Bypass Allegations

Recent reports have surfaced alleging that employees and volunteers of Binance were assisting Chinese users on how to bypass Know Your Customer (KYC) and other security protocols.

However, Binance has responded to these allegations, stating that it explicitly forbids employees from supporting users in circumventing any laws or policies.

A spokesperson from Binance has clarified that the company is taking action following the allegations. They stated, “We have launched an investigation into employees who may have violated our internal policies including wrongly soliciting or making recommendations that are not allowed or in line with our standards.”

The exchange has implemented advanced detection tools, which allow them to crack down on users in restricted jurisdictions, as well as actively block VPNs from said areas. Binance claims that it is extraordinarily rare that workarounds are possible and that it has multiple manual and AI-driven processes in place to prevent users from bypassing critical security procedures. Users found to have used any sort of workaround to avoid local law are restricted immediately.

While Changpeng Zhao, the co-founder of Binance, has made no comment on the situation at the time of writing, Binance has previously taken steps to address rumors that have spread via social media. In October 2022, the exchange faced allegations that it “swerved scrutiny” from regulators in the United States and the United Kingdom due to incidents in its operating history.

Prior to the recent incident, Binance had announced in February that it would delist low-trade volume nonfungible tokens (NFTs) that were listed before the implementation of its new KYC rules.