CZ reveals how many users left Binance after mandatory KYC

Leading crypto exchange Binance has taken a compliance-friendly approach to its business after years of cat-and-mouse games with regulators around the world and it has worked surprisingly well in terms of user retention, according to a new interview. with Binance CEO Changpeng Zhao.

Speaking to Bloomberg News, CZ Noted that Binance made Know Your Customer (KYC) processes mandatory “for global users, for every feature” in an effort to attract new users as a regulatory compliant business. He revealed that Binance lost around 3% of users after making KYC mandatory.

Binance did not immediately respond to Cointelegraph’s request for confirmation.

KYC is a common practice used by crypto exchanges and traditional financial institutions. It allows businesses to verify the authenticity of a user by requesting some form of real identification. Binance made KYC a requirement for all of its existing and new users on August 20 to access its products and services such as cryptocurrency deposits, transactions, and withdrawals.

“We believe that being compliant will allow more users to use us,” CZ said, adding that most people feel more comfortable using a licensed exchange.

Binance touted its decentralized and physically headless structure for years until CZ announced in July that the crypto exchange is ready to work with local regulators saying, “We want to be allowed everywhere. From now on, we are going to be a financial institution.

Related: Former Binance Executives Say Exchange Worth $ 300 Billion: Report

In his interview, CZ said that while regulators were initially skeptical about Binance, their attitudes changed as communications continued. “When people see me in person they say, ‘Look, CZ is very reasonable, very calm, not a crazy guy.’ So that helps build their confidence much faster, ”he added.

Binance recently established three subsidiaries in Ireland as part of CZ’s vision to establish a formal headquarters in different regions of the world. “When we started, we wanted to embrace the decentralized principles, no head office, work anywhere in the world, no borders,” CZ then said, adding that “it’s very clear now to run a centralized exchange, you need a centralized legal entity. structure behind it.

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