Binance Loses 90% Of Users After Implementing KYC

One of the biggest cryptocurrency exchanges in the world, Binance, like the majority of its competitors, has to deal with issues like money laundering, supporting terrorism, and negative news.

In an interview published by CoinDesk on August 1, three of Binance‘s compliance team’s most senior members spoke about the difficulties the world’s largest cryptocurrency exchange by trading volume faces in these areas and how it has impacted them.

Notably, Binance controversially decided to lower the maximum amount of Bitcoin that users without Binance KYC (know your customer) accounts were permitted to withdraw from 2 BTC to 0.06 BTC in July 2021.

Tigran Gambaryan, one of BNB’s top compliance officers, claims that the decision has cost the cryptocurrency exchange “billions of dollars in income.” When he talked about how BNB is exponentially bigger than its rivals but using “actual math,” he pointed out that the prevalence of unlawful activity is the same everywhere.

“We have lost 90% of customers after implementing KYC, losing billions in revenue,” he said.

However, just hours after the article claimed that BNB had lost 90% of its customers, Changpeng Zhao, the CEO of BNB, came to Twitter to declare the statistic a “mis-quote.” He said:

Binance is “equal to or better than most exchanges”

According to studies done by Binance, when the total volume of the exchange is compared to the amount of illicit money coming in, it can be observed that although some illegal money is being brought in, there is also a sizable quantity of money flowing in.

Gambaryan noted: 

“Binance is better or the same as most exchanges. Our stuff was drastically better than Kraken, better than Coinbase in some areas, and worse in some areas. But there’s not a single outlier.”

Gambaryan acknowledged that because BNB operates in so many different legal jurisdictions, it “makes our job tough” and that the exchange needs to focus more on those nations (France, Italy, and Dubai). However, the fact that it operates there gives law enforcement officials the opportunity to take action.

“There is a huge difference [in amount of illicit activity], not only in deposits, if you look at a total percentage of transactions. BNB is exponentially larger than its competitors.”

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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