CZ reveals how many users left Binance after mandatory KYC
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.
âWe believe that being compliant will allow more users to use us,â 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, âWe want to be allowed everywhere. From now on, we are going to be a financial institution.
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In his interview, CZ said that while regulators were initially skeptical about Binance, their attitudes changed as communications continued. âWhen 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, âhe 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. âWhen we started, we wanted to embrace the decentralized principles, no head office, work anywhere in the world, no borders,â CZ then said, adding that âit’s very clear now to run a centralized exchange, you need a centralized legal entity. structure behind it.