Binance loses 90% of its customers and billions of dollars in income after introducing KYC
Binance, one of the world’s top cryptocurrency exchanges, faces the issues of money laundering, terrorist funding, and negative news, as do most of its competitors.
In an August 1 interview with CoinDesk, three of the most senior Binance’s compliance team members described the issues that the world’s largest cryptocurrency exchange by trading volume confronts in these areas and how it has impacted them.
Notably, Binance took the controversial decision in July 2021 to cut the maximum Bitcoin withdrawal limit for users without Binance KYC (know your customer) accounts from 2 BTC to 0.06 BTC.
However, according to one of Binance’s chief Compliance Officers, Tigran Gambaryan, the exchange has lost “billions in income”. When discussing how Binance is exponentially more prominent than its rivals, he highlighted that the percentage of illegal conduct is similar across the board using “actual math.” “We have lost 90% of our clients and billions of dollars in income since adopting KYC,” he claimed.
However, only hours after a story claiming Binance had lost 90% of its clients was published, Binance CEO Changpeng Zhao moved to Twitter to label the misquote amount, as he noted. “It’s a total misquote. Consider the statistics…”
According to studies undertaken by Binance, when the quantity of illicit money being brought in is compared to the total volume of the exchange, it can be observed that, although some illegal money is being brought in, a large amount of money is also being brought in.
Binance operates in several legal areas, which the chief compliance officer stated: “makes our work tough.” Accordingly, Gambaryan recognised the exchange must focus more on those nations (France, Italy, and Dubai). However, the fact that it operates in such regions allows law enforcement to take action.
Notably, Binance overtook Coinbase to become the exchange with the most Bitcoin held internationally, gaining regulatory clearance in Dubai in March, Bahrain, France, Italy in May, and Spain in July 2022.