Changpeng Zhao, the CEO of Binance, gave new light on the exchange’s compliance roadmap and its users’ perspectives on KYC.
KYC is a popular procedure used by crypto exchanges and traditional financial institutions. It enables enterprises to verify a client’s legitimacy by mentioning some form of verifiable proof. On August 20, Binance made KYC mandatory for all current and new clients to access its products and administrations, such as digital currency shops, exchanges, and withdrawals.
The consequences of mandatory KYC for the major crypto exchange
Binance made Know Your Customer (KYC) protocols necessary “for worldwide users, per each feature,” according to the CEO, in order to reach new users as a regulatory-compliant corporation. He disclosed that after making KYC mandatory, Binance lost around 3% of its users.
“We believe that by being compliant, we will be able to attract more customers,” Zhao stated, adding that most people prefer to utilise a regulated exchange.
For years, Binance bragged about its decentralised, no-physical-headquarters structure, until Zhao stated in July that the crypto exchange is willing to deal with regulatory agencies, saying, “We want to be licensed everywhere.” We’re going to be a financial institution from now on”.
Regulators were at first doubtful with regards to Binance
Changpeng Zhao stated in his talk that regulators were first wary of Binance. However, their views have improved as the company’s communications have progressed. “When people meet me, they tell me, ‘Look, CZ is really rational, quite calm, and not a wild guy’. As a result, it is much easier to gain their trust,” he continued.
Binance has opened three branches in Ireland. As part of Changpeng Zhao’s plan to create formal headquarters in several regions around the world. “We wanted to embrace the decentralised ideas when we first launched. No headquarters, work all over the world, no borders”, Zhao remarked at the time. He added, “It’s pretty evident now to run a centralised exchange, you need a centralised legal company structure behind it”.