Binance Assigns Prime Brokers to Conduct Checks to Identify US Investors

Binance has reportedly instructed prime brokers to implement stricter verification procedures to prevent US investors from accessing the cryptocurrency exchange. This action follows the fallout from the plea deal struck with US authorities last year.

Binance Asks Prime Brokers to Tighten Security Checks

Since the period around November’s guilty pleas, Binance has instructed prime brokers like FalconX and Hidden Road, serving institutional traders, to collect more detailed information from their clients. These instructions come as part of efforts to enhance compliance and regulatory measures.

The checks involve inquiries about office locations, and the whereabouts of employees and founders, and necessitate signed attestations from respondents verifying the accuracy of their responses.

In November, Binance pleaded guilty to violations of US anti-money laundering and sanctions laws, resulting in a landmark $4.3 billion penalty. The Department of Justice had accused Binance of targeting US customers, including significant traders, while failing to comply with relevant American legislation.

According to the Justice Department, Binance employees actively contacted VIP clients in the United States, urging them to provide information indicating that they were not situated within the United States.

Strict Vigilance on New Token Listings

Given this context, the cryptocurrency sector is vigilant regarding potential compliance adjustments at the pivotal digital asset trading platform. For example, insiders familiar with the matter have indicated that Binance has enhanced its criteria for listing new digital tokens, as reported by Bloomberg. In response to inquiries regarding stricter checks by prime brokers, Binance said:

“Binance is fully committed to compliance and has made public how it assesses end users who can access the Binance platform. By making its standard transparent, Binance gives clarity to enterprises who want to access its market-leading liquidity.”

The exchange referenced its Binance Link Program, designed to offer trading and connectivity services to enterprises, including exchanges, brokers, and automated trading platforms.

Last year, the platform’s portion of global spot crypto trading volumes declined to approximately 30% from nearly 60%, but it has rebounded to around 40% since then, as per CCData. A remarkable surge in Bitcoin’s price over the past year has revitalized speculative enthusiasm and trading activity in the digital asset industry.

The positive performance of BNB Coin, the native token of Binance’s exchange, suggests that digital asset traders are optimistic about the platform’s future. Moreover, BNB has surged by about 80% this year, surpassing Bitcoin’s growth rate.