The Wild West: Exploring Binance’s Exposed Leaks and How They Are Allowing Users to Bypass KYC and AML Regulations

When you think of the Wild West, what comes to mind? Overturned law, sinister outlaws roaming the town, and of course a band of rambunctious cowboys all answering to no one except the will of their own free spirits. Today, instead of guns, they are armed with computers and crypto exchanges, and instead of outlaws, they are affiliated with Binance. But as recent CNBC reports have indicated, the Wild West of crypto trading is just as chaotic, and just as untamed as its authentic counterpart during the MID-1800s.

On March 23rd, CNBC ran a report surrounding a group of Binance ‘Angels,’ employees and volunteers trained to promote the use of Binance who gave customers blatant advice on how to bypass the exchanges current KYC, residency, and verification systems. After reviewing hundreds of posts found in their Discord server and Telegram group, which has been cited as running since 2021-2023, CNBC was able to further back up their claims. These messages included instructions on how to forge bank documents and provide false addresses while registering on Binance. Tactics to trick the system such as switching a given nationality to access a Binance debit card were also openly discussed.

The use of Binance and other crypto exchanges remains strictly forbidden in China, yet according to CNBC’s research, many users are still somehow managing to access the platform. Binance has since responded to the report, claiming to have taken disciplinary action against any employees found to be in violation of company policies, yet this has not stopped concern from those in the crypto space. Famed speaker and professor at the Federal Deposit Insurance Corporation (FDIC), Sultan Meghji, expressed his worry about the situation, citing terrorist use of the infrastructure as a key concern. Jim Richard, Wells Fargo’s Head of Anti-Money Laundering, also chimed in that “the techniques used to bypass Binance’s KYC controls” could have far reaching implications even abroad, making it increasingly difficult to forecast the exchanges imminent future.

Overall, CNBC’s report paints a concerning picture of the Wild West of crypto trading, highlighting the need for stronger safety protocols and regulations to be enforced in order to protect customers and exchanges alike. There is no doubt that a platform like Binance can be an invaluable tool for users, yet allowing a platform as influential as Binance to run in such an unbridled fashion should cause us all to question the level of trust that is placed in the crypto trading world. As time progresses, it will be interesting to see how these issues play out, and whether or not the Wild West will continue to be a safe, yet untamed haven for those willing to risk it.