CNBC has released an investigative piece on Binance citing allegations of allowing its Chinese customers to override the country’s cryptocurrency trading ban.
According to the article, Binance staff and volunteers have taught others how to trick the exchange’s know your customer (KYC), residency, and verification processes and how to get a Binance debit card by lying about where they live.
These disclosures cast doubt on the efficacy of Binance’s anti-money laundering (AML) efforts, and experts have voiced concern that the exchange’s lax enforcement of KYC guidelines may have consequences beyond China.
Chinese customers using proxy servers to bypass crypto restrictions
The exchange has seen a steady flow of Chinese customers looking for ways to circumvent China’s ban on cryptocurrency trading. According to the study, customers from China and other countries routinely circumvent Binance’s regulations by using a proxy server to disguise their location.
Messages from Binance’s official Chinese-language chatrooms signified that workers and volunteers spelled out techniques that involved faking bank documents or offering incorrect addresses and manipulating Binance’s systems.
As cryptocurrency exchanges have been illegal in China since 2017 and crypto itself will be illegal in 2021, Binance’s Chinese customers run a significant risk using these methods. The items that Chinese citizens desire access to are likewise unlawful under Chinese law.
Source: https://crypto.news/cnbc-report-shows-how-chinese-binance-customers-bypass-crypto-bans/