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Changpeng Zhao discloses how many customers abandoned Binance following the implementation of obligatory KYC

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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.

According to a new interview with Binance CEO Change Zhao, the major crypto exchange Binance took an interoperability approach to its business following quite a while of wait-and-see games with authorities around the world, and it performed remarkably well in terms of user loyalty.

“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”.

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