Monday, December 6

Binance reveals how many customers it lost by removing their privacy

Certain things have changed at Binance, things that were initially important to the bitcoiner community, such as privacy when trading cryptocurrencies. However, the numbers show that his changes to KYC policies have not hurt the company.

As reported by CryptoNews yesterday, Binance publicly supported the use of KYC processes on cryptocurrency exchanges. This policy, which means “know your client” or “know your client”, allows companies to request personal information from their users before using their services.

Thus, Exchanges – platforms to operate cryptocurrencies – can verify that their users’ funds do not come from criminal actions and even pass that information on to the authorities. This prevents people’s money movements from having privacy, one of the fundamental principles that gave rise to Bitcoin.

However, Changpeng Zhao – aka “CZ” – the head of Binance, announced in a interview with Bloomberg that this rule has not interfered with his community. Confirmed that It has only lost 3% of its customers since the KYC level increased three months ago, when he demanded proof of facial identity and document.

Changpeng Zhao “CZ” believes that regulation of cryptocurrencies is inevitable. Source: Twitter.

Cryptocurrency users lose privacy on Binance with KYC, but don’t switch exchanges

Considering this statistic, it would seem that users are not bothered by providing personal data to operate cryptocurrencies. CZ notes that this is because “most people are more comfortable using a regulated exchange.” Platforms Coinbase, Kraken, and LocalBitcoins also increased their KYC demands recently.

Likewise, CZ states that the market is free and those who do not want to follow its KYC rule can use another exchange that does not have it. Although, the company estimates that enforcing this mandatory identification policy across the industry would allow to regulate bitcoin, as well as the cryptocurrency ecosystem, and is where you think the future is.

He made this comment on November 16 in a statement, where he informed his intention to help regulate bitcoin globally together with the government authorities of each country. In the announcement he also published the 10 fundamental rights that he believes all cryptocurrency users should have.

Binance, which advertised itself as “a decentralized platform” for trading cryptocurrencies since its inception in 2017, acknowledges today that its policies have changed. CZ declared in an interview with Reuters that, to regulate the ecosystem, it is necessary to manage a centralized exchange.

When we started we wanted to adopt decentralized principles, without headquarters, working worldwide, without borders. It is now very clear that, to manage a centralized exchange, you need a centralized legal entity structure behind it.

Changpeng Zhao «CZ», director de Binance.

This policy change came just after various countries in Europe, such as Italy and the United Kingdom, imposed legal obstacles on cryptocurrency exchanges to function. Since then, Binance has increased its KYC requirements to comply with the regulatory framework. It even communicated that it will establish its office center in Europe.

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