Crypto exchange Binance's employees reportedly helped customers in China bypass the platform's Know Your Customer (KYC) protocols, according to an investigation conducted by CNBC.
The employees allegedly aided Chinese customers through chat rooms controlled and operated by Binance, sharing some key techniques.
As part of the investigation, CNBC reviewed hundreds of messages between 2021 and 2023 from a Discord and Telegram group controlled by Binance employees and volunteers.
- The groups host more than 220,000 users and can be accessed freely by anyone who joins.
- The process allowed Chinese customers to access Binance by hiding their residence of country or origin.
- The messages came from accounts of the platform employees and volunteers who call themselves "Angels."
- Techniques shared to bypass the security and verification protocols include forging bank documents, offering false addresses, and simple system manipulations.
- Users evading the protocols could face serious legal actions because crypto exchanges and cryptocurrencies have been forbidden in the country since 2021.
- A Binance spokesperson stated that they had taken legal action against employees who may have violated their internal policies and launched an internal investigation.
KYC is a standard regulatory process that is generally implemented by financial service providers, including banks and crypto exchanges, to identify and verify their customers by asking for some key personal information and documents.
- The process aims to improve trust in the industry, help service providers to assess the risks, and combat money laundering and terrorism financing.
- In 2021, Binance made KYC obligatory in all services for customers.
