A report by CNBC claims to have revealed how Binance employees and volunteers are helping Binance users to avoid KYC checks.
CNBC translated a Chinese language Binance Discord server and Telegram group and found that many messages were from Binance staff showing customers how to lie about their country of origin to get Binance Debit cards.
In other cases, users in mainland China where cryptocurrency trading is banned were told by Binance employees to switch their VPN on and register as if they were from Taiwan. They were also specifically told to make sure that their VPN was not coming from the United States, Singapore, or Hong Kong since Binance restricted access from those countries.
Binance chief Changpeng Zhao (CZ) has previously endorsed the use of VPNs saying in a since-deleted tweet, “VPNs is a necessity, not optional.”
Some users were guided to a special Android application version of Binance, designed specifically for the Chinese mainland. The application allowed access to Binance services without having to use a VPN. This application reportedly allowed people to complete the KYC process using identity documents from China and can be accessed from within China without a VPN.
Want to avoid KYC? Binance Angels are here to help
In most cases, Binance employees try to shift questions about KYC evasion to Binance-trained ‘Angels’ — volunteers who participate in Binance chatrooms. CNBC reported multiple instances of these Angels guiding mainland Chinese users on how to change their country to Taiwan and avoid giving their proof of residence. They also encouraged people to set up international firms in order to continue to access Binance.
More recently, Angels have reportedly been pushing users to consider purchasing ‘digital residency’ from Palau in order to access the platform. A video describing the process was posted in another deleted tweet from a Binance client relationship manager and described purchasing the ID, uploading it to Binance, and then modifying a bank statement to match the appropriate address in order to bypass checks.
Users also described how they could purchase false documents on various marketplaces.
Changpeng Zhao, CEO of Binance and owner of Binance US has publicly described Binance’s KYC/AML process as better than traditional finance.
Prosecutors are reportedly weighing an indictment against Binance for money laundering, though the company believes it would be able to negotiate a deal over these charges.
Update 1:40 PM UTC, March 28: Clarified allegations in headline.