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Binance Staff Trains Users to Bypass KYC and AML Rules (Report)

On March 23, CNBC reported that a group of Binance Angels shared technology that allows users to bypass the platform’s KYC, residency, and verification systems.

CNBC confirmed the news by reviewing hundreds of websites that the information was posted on a Discord server and a Telegram group controlled and operated by Binance, apparently running from 2021 until March 2023.

Crypto is banned in China, but Binance employees and volunteers tell people how to get around the ban

— CNBC (@CNBC) March 24, 2023

Know your customer? What is KYC?

As reported by CNBC, some Binance employees and “angels” (volunteers trained by the exchange to promote its use) provided video guides and tutorials showing the steps of KYC Users forge bank documents and provide false addresses when registering on the platform.

The employee even demonstrated the skill of faking the country of residence to obtain a Binance debit card.

“An individual who uses the Yaya handle and identifies as a Binance employee told them to activate their VPN and register as a Taiwanese resident, then switch their nationality back to China. The employee also It is recommended to avoid VPN nodes in the US, Singapore, and Hong Kong.”

The report also revealed that many users in China were able to access VPNs despite the country’s ban on encryption since 2017. Currency trading and the use of digital assets will be banned from 2021, but Binance’s services still exist.

Binance is investigating reports

CNBC says, “Technology shared with and between clients also “Calls into question the effectiveness of its money laundering efforts” casts doubt on the exchange’s ability to ensure that its customers do not engage in illegal money laundering or terrorism

Likewise, several FDIC professor and former Chief Innovation Officer Sultan Meghji, among others Regulatory experts expressed their concerns about Binance’s ability to comply with KYC and AML regulations. Such reports have raised regulatory concerns about the platform because it could allow transactions by terrorists or criminals from North Korea or Russia, they said.

“If I have 8 out of 10 people who have concerns about Binance from a regulatory standpoint and a national security standpoint, that makes it 10 out of 10[. ..] , Russian oligarchs, etc., can use it to gain access to this infrastructure.”

Jim Richards, Head of Anti-Money Laundering, Wells Fargo Bank, Emphasize that “techniques to bypass Binance’s KYC controls could have ramifications outside of China,” precisely because the exchange may silently support operations in other sanctioned countries.

According to a Binance spokesperson, the exchange has already taken action against employees who may violate the company’s internal policies, make prohibited recommendations and violate its rules. Employees who violate these policies will face an audit and possible immediate termination.

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