All users of the bitcoin exchange must now upload an ID and a selfie to be verified.
Binance, the bitcoin exchange, has made changes to its account verification policies. All users will be required to follow rigorous know-your-customer procedures. All new users will need to provide additional personally identifiable information (PII), in order to be able to access Binance services, such as trades, deposits, and withdrawals. Existing users won’t be able to access most services, except withdrawal, until they have provided the required PII.
All Binance users will now have to undergo a more thorough identity verification process called “Intermediate Verification.” Basic Verification, which required users to provide their full name, address, nationality, birth date, and full name, is no longer available. To trade BTC and other cryptocurrencies on Binance, users must go beyond basic verification. They will need to upload photos of a government-issued ID card and a selfie-and also undergo live face verification. All data will be sent directly to the exchange’s servers, which will then review it and approve or deny it.
“Binance is announcing these measures to help support its efforts in Know Your Customer (KYC) and Anti-Money Laundering (AML),” the statement said, citing “enhanced user protection” and the need to “combat financial crime” as motives underlying the changes.
Even though some of the alleged reasons behind KYC seem legit – to prevent criminal financial activity and terrorism – the long-term effectiveness and downstream consequences of these tactics are rarely discussed. Instead, proponents of offensive tactics worldwide hold KYC/AML as the holy grail to combat crimes, even though it often doesn’t deliver and end up increasing the attack surface for every single individual.
It is also reasonable to assume that criminals could adapt and circumvent KYC procedures completely in the short term. Bad actors can adapt and circumvent KYC procedures to cover more use cases and illicit activities. This makes it a cat-and-mouse game with reduced effectiveness. More importantly, KYC can give future government leaders supercharged surveillance powers. They may be able to use this power and information as much or little as they want, without the consent of users. Hacking of centralized data centers can also lead to the compromise of user data, increasing attack vectors, and even resulting in more hacker attacks.
Mainstream narratives do not allow for the negative aspects of KYC to come up, which leaves the door open to any regulation that would supposedly benefit society as a whole at the expense of individual rights. This is often not possible and can lead to harm to the individual’s privacy rights. In an environment where regulations are rarely discussed openly, people who value individual rights are often referred to as the “screeching voice of a minority” in a regulatory system. Both the person and the entire population lose as they are forced to bear ever higher personal costs for the alleged welfare.