A recent investigation by CNBC has dropped a bombshell, Binance employees may be actively assisting Chinese users in evading the country’s harsh crypto regulations.
The investigation scrutinized translated messages from Discord servers and Telegram groups linked to Binance, the world’s largest cryptocurrency exchange by volume and assets.
While Binance claims non-operation in China following the 2021 trading ban, messages from official Chinese-language chatrooms show Chinese customers bypassing Binance’s Know Your Customer (KYC) controls, revealing their actual country of residence Let’s hide
Simple techniques range from forging bank documents and fabricating false addresses to exploiting flaws in Binance’s systems, often shared by Binance employees themselves.
Intriguingly, Binance staff and volunteer ‘angels’ have reportedly supplied video guides and documents that allow users to falsify their country of residence in order to secure a Binance Debit Card and transfer their crypto assets to a traditional bank account. Train to convert to checking account.
KYC/AML bypass puts national security at risk
These findings ignite serious concerns regarding Binance’s KYC and Anti-Money Laundering (AML) efforts.
Sultan Meghji, Duke University professor and former FDIC Chief Innovation Officer, resonant His apprehensions for CNBC.
“If I had eight out of 10 concerns about Binance from a regulatory point of view and from a national security point of view, that takes it to a 10 out of 10,” said Meghazi outlining the potential national security risks as an academic. How malevolent actors such as terrorists, criminals and money launderers can take advantage of such technologies.
In contrast, the Binance founder Changpeng ‘CZ’ Zhao The exchange’s KYC system with advanced VPN detection tools has been praised as a ‘billion-dollar effort’.
A Binance spokesperson stressed that employees are “explicitly prohibited from suggesting or aiding users in circumventing their local laws and regulatory policies,” with violations resulting in immediate termination or an audit.
How Users Are Destroying Binance?
Binance has blocked Chinese mobile phone registrations and Chinese IP addresses since 2021.
Nevertheless, the investigation revealed recommendations for VPN use to hide users’ locations and to breach the Chinese domestic firewall.
Users were counseled to register as residents of Taiwan, later changing their nationality back to Chinese while disclosing VPN nodes in the United States, Singapore and Hong Kong to dodge potential domestic project sanctions. .
Another worrying finding is a mirror platform hosted by Chinese giant Tencent that facilitates onboarding for Chinese customers using home phone numbers, though Binance denies accreditation.
Further advice includes registering email hosts in crypto-friendly countries, forming foreign companies for KYC purposes, and obtaining Palau Digital IDs with remote mail-forwarding addresses in Austria, as well as PDFs created through editors. Gone with fabricated bank statements.
The investigation also revealed Telegram services advertised for forging financial documents as proof of address. These revelations raise questions about the source of the funds, as financial institutions may consider funds originating from Binance suspicious.
With growing concerns over Binance’s regulatory compliance and national security, investors and regulators alike must intensify their vigilance to protect the integrity of the crypto ecosystem.
this news comes like this Coinbase faces an SEC lawsuit Despite years of demands for SEC involvement in regulatory clarification and best practice compliance.