Topic: Binance a “high” regulatory risk (Read 265 times)

If Binance ever has to do KYC for every customer they will lose a lot of business. The no personal information for withdrawls less than 10k each day is huge.  They also have monero as well so you can break the track of any of your previous coins.  They may just have to end up moving their company headquarters again if regulators try to come down hard on them.

i sure hope they have a lot more than 80k bitcoins in cold storage.....


the report by the anonymous "institute" hiding behind a private domain registration? the one that popped up right when the CFTC launched their market manipulation investigation into bitfinex/tether?

did you look into the methodology of their analysis? it's a joke:


NY regulators may be impotent. it's the feds they really need to worry about. binance can get got just like btc-e and 1broker were.

I would encourage you to review this bitcoin address. I have a good reason to believe it belongs to binance, being one of their cold storage addresses. This proves they have at least $400mm worth of bitcoin either belonging to themselves or their customers. I believe cold storage to be a better indicator of real volume, even if indirectly so, because it cannot be faked. An exchange with fake volume can display bids and asks that indicate deep order books that get pulled when someone tries to trade against the orders. It can also have money on another exchange with real volume, and leverage the other exchange's order book. I also read this report last year, but I like to do my own research.


I was under the impression binance did not serve customers in NY state, upon a review of their TOS, I am unable to find any prohibition of NY customers, although perhaps they will ask upon having information suggesting a customer resides in NY state. If a NY regulator were to try to impose any regulatory actions against binance, they would need to get the Japanese or Tawian government to agree to help, and perhaps the US State department before they can even contact either of these.

If someone was laundering money, they would probably not use Coinbase to use fiat to buy bitcoin to send to binance. Transaction history of inputs is publicly available on the blockchain, but with advanced analysis, it can to determined even if mixers are used.

The privacy policy of most major exchanges prohibit them from sharing customer specific information with eachother. They may share more general information about their coin holdings, such as if a specific address belongs to the exchange, if an address was used to receive a customer deposit, or if a specific transaction was used to process a customer withdrawal. They will probably not disclose (they should not) if two deposit addresses, or two withdrawal transactions belong to the same customer.

It's obvious what they are referring to here, and that is because Binance still allows semi-anonymous accounts to be opened.

I wouldn't doubt that if Binance keeps this up, no matter how much they try to dodge the regulatory bodies and even moving around globally to different countries, eventually they will have to still be forced into asking for KYC for all members the same way a lot of previously big name exchanges have, or cease their service to certain countries at the very least.

I personally wouldn't see this as a risk, but obviously, the regulatory bodies in certain countries do, and they will do something about it eventually as we see time and time again. Even P2P platforms like LBC is falling to this pressure. Binance knows what they are doing and what they are not. They want to target people who are privacy-centric and don't want to submit ID, but it'll only get harder to continue that aim into the future.

I won't want to judge an exchange too be risky because of the KYC related issue. I mean, if any exchange site should have been on that site, then it should be bithumb. The amount of hacking they are receiving lately is disheartening even after the security the KYC they request from users. Moreover no exchange can give you an hundred security.

I'm actually quite surprised with how nicely Binance has avoided having to change their policy on KYC thus far. It's a big reason why they've been able to capture a huge percentage of the market share in crypto exchanges in recent years, as other exchanges like Bittrex and Poloniex have already been pressured into putting in strict verification protocols.

Whether they can keep this up, especially through the next bull market is questionable.

It's clear that it's a matter of time before regulatory authorities around the world will attempt to force them into either ceasing to offer their service to their jurisdiction, or have them force their users into submitting KYC, and this article is a reflection of that. How long more can Binance keep this up is a question to ask, and it's a reason why I wouldn't blindly trust their reputation and track record, and keep my coins off their platform whenever it's not being used in actual transactions.

Many ppl use Binance to make them cryptocurrency as fiat.

As fast as Binance climbed up to where it is today, that fast can it also lose its dominance. Bittrex and Poloniex are perfect examples of how fast things can change here in crypto, where Poloniex is still bleeding.

Bittrex is slowly gaining back some of its volumes, and their actual BTC/USD fiat pair is growing too, which is quite bullish. We need more actual dollars flowing into this ecosystem to not depend too much on USDT.

You just created an account to post this, it seems like you have some hidden agenda. about this news, I have only a few things to say about it. First governments should be concerned about regulating the market and then they would demand this KYC, because it does not make much sense that the owners of the exchanges are anonymous, but the exchange customers are not anonymous... I also saw many hyips sites being created by many years and I have not seen governments being too determined against hyip sites and payment processors who agreed to get involved with HYIP/Ponzi sites.why governments are being so intolerant of cryptocurrency?

It's safe to say that most of the funds that people send to Binance come from fiat exchanges like Coinbase, and they are withdrawn back to fiat exchanges like Coinbase. In other words, there is no such a thing as anonymity, especially not when you take into consideration that the majority of the people don't even understand what coin taint really is.

I think that some exchanges might even hand over user data to each other in order to prevent illicit acitivity. It's pure speculation from my side, but it's not out of the ordinary considering that Coinbase is the most regulated exchange, and exchanging data happens within the legacy financial industry too.

A clear policy is a lot more than just asking your ID card and it is true that some exchanges are rather lenients about it. The European Union will regulate all this, through new directives concerning KYC/AML. This is something we already know, there have already been several reports to this during the last 2-3 years. The EU will try to regulate the industry the same as it does with the banking industry, don't worry about it. We're more or less prepared, even Bitcointalk requires KYC

The problem for companies is that there are no clear directives common to the whole European Union, which also makes the task more difficult, at least more so than for the directives of their country in which they're registered.
For people, we must, of course, follow our local laws but we become limited by European laws... once again...(like with many others industries btw).

This is a "high" regulatory risk but like many other exchanges, and just because this company generates large volumes it does not make it riskier than another. BTC-e is a good example to remember.
To take the case of Binance, anyway, it will be regulated at the highest level, similar to banks as I said, but all the others will have to follow as well.

@NeuroticFish
Binance works with fiat (EURO) via Binance Jersey

i don't buy that. binance has all the signs of volume pumping, they just don't make it quite as obvious as other exchanges. its thin-ass books look exactly like okcoin's always did. such volume, much impress, but never any bids to dump into. right......


if they're serving new york customers then they do. binance receives (and presumably responds to) subpoenas from USA regulators all the time. shapeshift similarly doesn't process fiat and doesn't even hold custody of funds; they received 44 subpoenas in the second half of 2018, mostly from USA agencies.

Of course it's a high regulatory risk. When you're a company that's moved jurisdictions twice already, to finally settle in what used to be (or is) considered an offshore tax haven exempt from normal AML and KYC requirements, then you bet you're going to be considered a risk. It doesn't automatically make you a bad guy of course.

Not that it'll matter where Binance goes to. The EU's 5th AMLD is surely no escape.

Out of all the exchanges operating in the Eastern part of the world (operating out of Asia), I am most comfortable with Binance. The primary reason behind this revolves around the lack of fake trading volume on their exchange, and the prevalence of fake trading volume around other exchanges.

Even though the New York State AG sent an inquiry to Binance, I do not believe the NYAG has jurisdiction over them.

Allowing customers to withdraw any amount without being subject to KYC can theoretically allow someone to launder an unlimited amount of money if they create multiple accounts. They may do blockchain analysis to somewhat prevent this if someone is clearly depositing coin owned by the same entity via multiple anon accounts.

Below are taken from the link shared by OP

In the report, Coinfirm identified Binance as having a “high” regulatory risk based on “exposure to anonymous activity,” since deposits and withdrawals for values below 2 bitcoin (less than $8,000 as of press time) reportedly did not require KYC as of February 2019.


That's currently their operating standard and I think that attracts more clients too.
Money laundering of course have their laws to be followed but I don't think Binance have violated an AMLC law since they have been operating for a long period and we haven't heard any news regarding the regulatory sanction.

I believe they are operating in Malta and I heard that the regulatory measures are not so strict.

While I do understand that the exchanges where people deposit or withdraw fiat currencies need  - to comply the laws - KYC/AML, from what I know Binance works with USDT and no fiat at all.
Edit: I was told that Binance Jersey works with fiat after all. Well, in this case I'd blame the countries that allow this, not the businesses that take the opportunity.


This sounds more like politician blah-blah and there's a good chance Binance will not care about it.
And if the centralized exchanges will "fall" in the KYC battle of nerves, users "from certain countries" will probably have (or build) decentralized exchanges, or even their own centralized ones welcoming western money and crypto coins.

Binance a “high” regulatory risk based on “exposure to anonymous activity,” according to report by Coinfirm and AMLT Token in Coindesk. What do you think about future of AML and KYC in cryptocurrency exchanges? EU going to regulate it.
https://www.coindesk.com/most-crypto-exchanges-still-dont-have-clear-kyc-policies-report