Binance Is Making It Harder to Trade Bitcoin Anonymously Amid Regulatory Trouble

[RSRS]

Binance, the world's top exchange by trading volume, is feeling the heat from regulators.

In an effort to cool down, it announced changes that help it better comply with local regulations, including more restrictions on customers who haven't completed all steps of its user verification process.

As of today, new users on the exchange will be limited to daily withdrawals of 0.06 Bitcoin, or the equivalent of roughly $2,000, if they have only completed the platform's Basic Account Verification. The previous limit was 2 BTC per day, or roughly $70,000 at today’s prices.

We’re enhancing our KYC efforts to further our leadership in this area.

Daily withdrawal limits will be adjusted from 2 BTC to 0.06 BTC (roughly ~$2,000 USD) for accounts who have only passed Basic account verification.https://t.co/gdim6HdLhU

— CZ 🔶 Binance (@cz_binance) July 27, 2021

New users will begin facing the restrictions starting between August 4 and August 23. Those who complete all the verification steps can withdraw as much as 100 BTC.

Binance uses three levels of user verification. The Basic level asks for name, nationality, date of birth, and address. It allows people to quickly get trading crypto for other crypto, as well as deposit funds, and withdraw crypto—as well as a very small amount of fiat, $300 for the life of the account.

The Intermediate level asks for identification and photos to substantiate some of the information one provided, while Advanced Verification also requires a proof of address in the form of a utility bill or bank statement.

Taken together, these levels constitute the exchange's KYC, or know your customer, process. KYC is a requirement for financial institutions—it aims to prevent criminals from laundering money or stop those on a sanctions list from accessing funds.

Binance has said before that it would beef up KYC. In 2019, it partnered with regulatory-tech company IdentityMind to automate its KYC and anti-money laundering processes. It had previously partnered with Refinitiv in 2018 on a similar process.

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[mlawson71]

They also released a statement that they will cease to to offer crypto margin trading with GBP, EUR, and AUD. Moreover, the exchange will also reduce the maximum leverage it offers for futures trading. From now one this leverage is 1:20, from 1:125.

It looks like the regulatory trouble they're in is hitting them pretty hard.

[Proton]

Binance has significantly strengthened its KYC policy, withdrawals from non-KYC accounts. Previously, some hackers used this loophole to launder money, but after this, many customers who normally care about privacy will be lost.