Binance launches internal investigation following KYC bypass rumors

Following allegations that Binance employees and volunteers have helped users bypass KYC protocols, the crypto exchange says it is launching an internal investigation.

A recent CNBC investigation claimed that Binance employees and volunteers were assisting Chinese users in bypassing Know Your Customer (KYC) and other security protocols. 

Speaking to Cointelegraph, a spokesperson from Binance stated that employees are “explicitly forbidden” from supporting users in circumventing any laws or policies. The spokesperson also said the company is taking action following the recent allegations.

“We have launched an investigation into employees who may have violated our internal policies including wrongly soliciting or making recommendations that are not allowed or in line with our standards.”

They went on to say that Binance has implemented “advanced detection tools” that allow the exchange to crack down on users in restricted jurisdictions, along with actively blocking VPNs from said areas.

According to the exchange, it is “extraordinarily rare” for workarounds to be possible. Binance claims to have “multiple manual and AI-driven processes” that help prevent users from bypassing critical security procedures.

“Furthermore, users who are found to have used any sort of workaround to avoid local law are restricted immediately.”

Changpeng Zhao, the founder and CEO of Binance, has made no comment on the situation at the time of writing, despite his regular commentary on social media. Previously, Zhao took to Twitter to address rumors that had spread via the Chinese messaging platform WeChat.

Related: Binance.US, Alameda, Voyager Digital and the SEC — the ongoing court saga

Prior to this incident, Binance had announced in February that it would delist low-trade-volume nonfungible tokens that were listed before the implementation of its new KYC rules. 

In October 2022, the exchange was hit with allegations that it had “swerved scrutiny” from regulators in the United States and the United Kingdom.

Previously, Binance has been open about its employee policies. In January, the exchange confirmed that its employees must adhere to a 90-day period prior to trading any digital assets to prohibit insider trading.

Magazine: US enforcement agencies are turning up the heat on crypto-related crime

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