Crypto exchange Binance lost 3% of its customers due to KYC demands
Changpeng Zhao, the CEO, of Binance has revealed that the exchange lost 3% of its users due to its regulatory troubles.
Binance battles with financial regulators around the world have been well documented with the crypto exchange forced to embrace a more friendly approach towards the demands of these regulators.
Changpeng Zhao, the CEO of the company, in a recent interview with Bloomberg, revealed that this change of approach has aided the crypto company in retaining some of its users who hitherto might have discontinued their patronage of the firm due to its regulatory troubles.
Binance lost 3% of users to KYC demands
According to CZ, Binance made the popular “Know Your Customer” policy mandatory for all of its “global users” who wanted to enjoy all the services the exchange provides. Thus, only those who successfully completed their KYC registrations with the exchange were able to have full access to activities on the platform.
The KYC policy is commonly used by traditional financial service providers to identify users using their platform. It requires a user to provide some form of identification or utility bill or in some cases both for them to authenticate the identity of their clients.
Crypto exchanges like Binance and others are being mandated by financial regulators to embrace this policy so that their platforms will not be used for illegal activities like sponsoring terrorism or money laundering.
Though the implementation of this policy led to the loss of around 3% of its user-base, embracing the new policy on Binance won it more friends amongst the regulators.
CZ believes the regulation-first approach the exchange is embracing will allow users to get more comfortable with the company. In his words, “We feel that being compliant will allow more users to use us. Most people do feel more comfortable using a licensed exchange.”
Just recently, we reported that Binance is the largest crypto exchange by trading volume and that its valuation could be around $300 billion making it one of the biggest firms on the planet if it was a publicly listed company like its rival, Coinbase.