The Binance exchange has launched a new mandate to step up Know Your Customer (KYC) and Anti-Money Laundering (AML) efforts.
The move comes as the stock and crypto industry faces increased scrutiny from regulators. The exchange has introduced a new consumer screening policy to protect assets and institutions, especially from criminal activity.
KYC policy is trending crypto exchange
In order to increase its compatibility with 21st century trends and to comply with the guidelines of financial regulators, crypto companies provide inspections to their customers by KYC.
This has become an important component that exchanges have to adhere to in order to increase their profile and maintain their market presence.
Kraken, a US cryptocurrency exchange, also announced tougher KYC restrictions on margin traders in the country. Binance Exchange announced their enhanced consumer protection by screening users on Friday.
KYC protection measures are similar to those required by financial service providers around the world to carry out KYC inspections of their institutions to curb illegal activity.
It is safe to say that the number one exchange strives to be proactive as a company that manages significant assets on behalf of its users.
Therefore, before consumers can access Binance services such as offering products, deposits, transactions and withdrawals, the intermediary verification step must be completed.
Companies that manage significant assets on behalf of their customers outsource this process to get to know their customers and who their customers do business with. This knowledge protects institutions and assets.
How improved KYC checks will help when trading Binance
Binance’s proactive KYC move is reportedly a step in enhancing its reputation with banks, financial institutions and other partners.
This move will increase confidence that the exchange can function safely in front of banks and other partners. KYC checks are seen as identity documents and the consumer’s country of origin as a deterrent to potential money laundering and other criminal elements.