- Sep 22, 2022
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One of the biggest cryptocurrency exchanges in the world, Binance, is forced to deal with issues including money laundering, supporting terrorism, and negative press.
One of the biggest cryptocurrency exchanges in the world, Binance, is forced to deal with issues including money laundering, supporting terrorism, and negative press.
In an interview published on August 1 by CoinDesk, three of the most senior members of Binance’s compliance team recently discussed the difficulties that the world’s largest cryptocurrency exchange by trading volume faces in these areas and how it has affected them.
Notably, Binance controversially decided to lower the maximum amount of Bitcoin that users without Binance KYC (know your customer) accounts were permitted to withdraw from 2 BTC to 0.06 BTC in July 2021. [1]
Tigran Gambaryan, one of Binance’s top compliance officers, claims that the decision has cost the cryptocurrency exchange “billions in revenue.” When he talked about how Binance is exponentially bigger than its rivals but using “real maths,” he pointed out that the prevalence of unlawful activity is the same everywhere. More specifically, he said, “We have lost 90% of customers after implementing KYC, losing billions in revenue.”
However, just hours after the article claimed that Binance had lost 90% of its customers, Changpeng Zhao, the CEO of Binance, came to Twitter to declare the statistic a “mis-quote.” He said:
“It’s a complete mis-quote. Look at the numbers…” [1]
Binance’s Credibility Among Claims of Fraud
According to studies done by Binance, when the total volume of the exchange is compared to the amount of illicit money coming in, it can be observed that although some illegal money is being brought in, there is also a sizable quantity of money flowing in.
“Binance is better or the same as most exchanges. Our stuff was drastically better than Kraken, better than Coinbase in some areas, and worse in some areas. But there’s not a single outlier,” Gambaryan noted. [1]
(Source Flickr.com)
Gambaryan acknowledged that because Binance operates in so many different legal jurisdictions, it “makes our job challenging” and that the exchange needs to focus more on those nations (France, Italy, and Dubai). However, the fact that it operates there gives law enforcement officials the opportunity to take action.
According to Gambaryan, “There is a huge difference [in amount of illicit activity], not only in deposits, if you look at a total percentage of transactions. Binance is exponentially larger than its competitors.”
Notably, Binance overtook Coinbase to take the lead as the exchange holding the most Bitcoin internationally, gaining this position thanks to improved PR efforts and complete regulatory permission in Dubai in March, Bahrain in April, France and Italy in May, and Spain in July 2022. [1]
One of the biggest cryptocurrency exchanges in the world, Binance, is forced to deal with issues including money laundering, supporting terrorism, and negative press.
In an interview published on August 1 by CoinDesk, three of the most senior members of Binance’s compliance team recently discussed the difficulties that the world’s largest cryptocurrency exchange by trading volume faces in these areas and how it has affected them.
Notably, Binance controversially decided to lower the maximum amount of Bitcoin that users without Binance KYC (know your customer) accounts were permitted to withdraw from 2 BTC to 0.06 BTC in July 2021. [1]
Tigran Gambaryan, one of Binance’s top compliance officers, claims that the decision has cost the cryptocurrency exchange “billions in revenue.” When he talked about how Binance is exponentially bigger than its rivals but using “real maths,” he pointed out that the prevalence of unlawful activity is the same everywhere. More specifically, he said, “We have lost 90% of customers after implementing KYC, losing billions in revenue.”
However, just hours after the article claimed that Binance had lost 90% of its customers, Changpeng Zhao, the CEO of Binance, came to Twitter to declare the statistic a “mis-quote.” He said:
“It’s a complete mis-quote. Look at the numbers…” [1]
Binance’s Credibility Among Claims of Fraud
According to studies done by Binance, when the total volume of the exchange is compared to the amount of illicit money coming in, it can be observed that although some illegal money is being brought in, there is also a sizable quantity of money flowing in.
“Binance is better or the same as most exchanges. Our stuff was drastically better than Kraken, better than Coinbase in some areas, and worse in some areas. But there’s not a single outlier,” Gambaryan noted. [1]
(Source Flickr.com)
Gambaryan acknowledged that because Binance operates in so many different legal jurisdictions, it “makes our job challenging” and that the exchange needs to focus more on those nations (France, Italy, and Dubai). However, the fact that it operates there gives law enforcement officials the opportunity to take action.
According to Gambaryan, “There is a huge difference [in amount of illicit activity], not only in deposits, if you look at a total percentage of transactions. Binance is exponentially larger than its competitors.”
Notably, Binance overtook Coinbase to take the lead as the exchange holding the most Bitcoin internationally, gaining this position thanks to improved PR efforts and complete regulatory permission in Dubai in March, Bahrain in April, France and Italy in May, and Spain in July 2022. [1]
