Based on recent research, individuals from all around the world are allegedly using inside information to manipulate Binance's billion-dollar security mechanisms.
Since the FTX crisis, Binance, the biggest cryptocurrency exchange in the world, has made considerable steps to lead the industry in terms of openness. A recent revelation, however, asserts that Binance insiders are allegedly assisting users in getting around security precautions.
An investigation by CNBC claims that Binance staff members and volunteers have helped Chinese consumers circumvent the exchange's Know Your Customer controls (KYC).
More than 220,000 people were registered in Binance's official Chinese-language chat rooms, based to the report. There, users purportedly have ways to get around the exchange's KYC, residency, and verification requirements and view shared messages.
Allegedly, these communications came from accounts that were labeled as Binance workers or as trained volunteers going by the name of "Angels."
Among the methods discussed were faking bank documents, attesting fictitious addresses, and other straightforward system manipulations.
"Employees who may have broken our internal regulations, such as by improperly soliciting or offering recommendations that are not permitted or consistent with our standards, have been disciplined."-As stated by a spokesman for Binance.
Changpeng Zhao, a co-founder of Binance and a frequent social media user, had not commented as of the time of this writing. Zhao previously used Twitter to refute rumors that had been circulated on the WeChat social media app in China.
A spokeswoman for Binance stated that the business is starting an internal investigation into the KYC rumors.
This development occurs as China continues to impose a severe ban on cryptocurrencies that started in 2021 and prohibited cryptocurrency exchanges in 2017. If discovered, Chinese users who circumvent KYC requirements to access Binance risk consequences.
Although regulators have not changed, some have urged the Chinese government to reconsider the ban on cryptocurrencies.
Chinese authorities are moving forward with their ambitions to create the digital yuan, which will serve as their national currency. Recent adoption initiatives have cost millions of dollars.