The world’s largest cryptocurrency exchange by trading volume, Binance, recently detailed the issues it encounters in these areas, as well as how it has affected them, in an interview that was published by CoinDesk on August 1.
Notably, Binance made the contentious decision in July 2021 to reduce the maximum amount of Bitcoin that customers without Binance KYC (know your customer) accounts may withdraw from 2 BTC to 0.06 BTC.
According to the CoinDesk article, members of the Binance compliance team Tigran Gambaryan and Matthew Price, who had previously worked as investigators for the cybercrime unit of the United States Internal Revenue Service, told Coindesk that the exchange’s stricter KYC policies had resulted in a financial burden for the company. According to the article, Gambaryan was quoted to have said that Binance has “lost 90% of customers after implementing KYC, losing billions in revenue.”
However, according to one of Binance’s lead Compliance Officers, Tigran Gambaryan, the move has cost the crypto exchange ‘billions in revenue.’ When he discussed how Binance is exponentially larger than its competitors but using ‘real maths,’ noted the rate of illegal behavior is the same across the board.
“We have lost 90% of customers after implementing KYC, losing billions in revenue,” he said.
But, just hours after the report was published stating Binance had lost 90% of its customers, Binance CEO, Changpeng Zhao took to Twitter to call the figure a ‘mis-quote’ he stated:
“It’s a complete mis-quote. Look at the numbers…”
According to research that Binance conducted, the amount of illegal money being brought in is weighed against the entire volume of the exchange, it can be seen that, although there is some illegal money being brought in, there is also a significant amount of money coming in.
“Binance is better or the same as most exchanges. Our stuff was drastically better than Kraken, better than Coinbase in some areas, and worse in some areas. But there’s not a single outlier.”
Binance is active in a variety of legal jurisdictions, which the lead compliance officer noted “makes our job challenging” consequently, Gambaryan acknowledged the exchange needs to place a greater emphasis on those countries (France, Italy, and Dubai). However, the fact that it operates in such areas makes it possible for law enforcement authorities to take action.
“There is a huge difference [in amount of illicit activity], not only in deposits, if you look at a total percentage of transactions. Binance is exponentially larger than its competitors.”
Notably, Binance flipped Coinbase to become the exchange with the most Bitcoin held globally benefitting from increased public relations efforts and securing full regulatory approval in Dubai in March, in Bahrain, France, and Italy in May, as well as in Spain in July 2022.
