Amid rising global inflation and fears of a global banking crisis, demand for risky assets, including Bitcoin, has skyrocketed significantly in the recent past.
Cryptocurrency exchanges have been banned in mainland China since 2017, while digital assets like Bitcoin were banned in 2021. However, mainland Chinese residents are eager to participate in the global financial revolution by all means. According to a report by news outlet CNBC, some Binance employees have been showing residents of mainland China how to circumnavigate the company’s Know Your Customer (KYC) feature.
Residents of mainland China have reportedly been taught how to forge bank documents and provide false proof of physical addresses. Apparently, Binance employees and Angels informed mainland Chinese residents about activating their virtual private network (VPN) and registering as residents of Taiwan, and then changed their nationality to mainland China. In addition, proxy users are also directed to a dedicated VPN-free domain name and a version of the Binance Android app, designed specifically for clients in mainland China seeking Bitcoin and cryptocurrency exposure.
Binance KYC Questioned Amid Global Bitcoin Adoption
Amid rising global inflation and fears of a global banking crisis, demand for risky assets, including Bitcoin, has skyrocketed significantly in the recent past. Also, a Bitcoin ban is not technically feasible based on global adoption and high decentralization of node validators.
Binance employees, volunteers, and customers have also reportedly shared video guides and documents showing mainland residents how to fake their country of residence to obtain the Binance debit card.
As a result, security experts worry that terrorism and money laundering will dilute Binance’s genuine customers in the process. Also, it is very easy for a North Korean hacker to create a Binance account and launder stolen coins.
“If I had an eight out of 10 concern about Binance from a regulatory perspective and from a national security perspective, this puts it at 10 out of 10,” said the Duke University professor and former FDIC chief innovation officer, Sultan Meghji.
However, a Binance spokesperson refuted claims that exchange employees are helping mainland Chinese residents subvert existing government laws.
“We have taken action against employees who may have violated our internal policies, including improperly requesting or making recommendations that are not allowed or in line with our standards. We have strict policies that require all users to pass KYC by providing us with their country of residence and other personally identifiable information,” the spokesperson said. said CNBC.
side notes
The Bitcoin market has grown significantly despite various bans from mainland China. Bitcoin is already used as legal tender in El Salvador and the Central African Republic. With more countries and states recognizing Bitcoin as a digital instrument with intrinsic value, the Chinese government is compelled to ease its crypto ban to attract international investment.
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