Binance's Battle with Regulation

Binance handles the largest volume of any crypto exchange worldwide, and for good reason. When the company was founded in 2017, the exchange provided customers with anonymous access to liquidity and the ability to leverage their trades. As a result, the early adopters adored the platform for its immense wealth-generating potential. 

As cryptocurrencies and blockchain technology become more mainstream, however, governments across the world are attempting to protect their citizens from danger. The United Kingdom, for example, asked Binance to remove their product from the local market under the guidance of their anti-money laundering standards. 

In response, Binance has introduced an array of customer safety initiatives and localized applications to comply with each region's rules and regulations. In the United States, users are blocked from accessing Binance and are redirected to Binance.US. Binance.US is a similar looking product with a few key differences: less altcoins and no leverage trading. US customers are also forced to comply with the SEC’s know your customer (KYC) standard. This requires Binance.US to collect users' Social Security Numbers, identification cards and other personal information for tax reporting purposes.

While many crypto pioneers see this as the end of Binance’s golden era, mass crypto adoption is likely aided by some forms of regulation. Regulation and taxation are also subtle government admittances to the staying power of the cryptocurrency industry.

Binance has launched a series of campaigns and applications to help users stay safe and keep track of their taxable income. From anti-money laundering to responsible trading, Binance hopes these campaigns will help them win the favor of regulators worldwide.

Additionally, Binance has launched a global KYC effort. Now, no matter what country you’re in, you’ll need to verify your identity to make a Binance account. Binance also lowered their maximum leverage from 100x to 20x, along with other leverage trading platforms FTX and ByBit.

According to Binance, “Our CEO, CZ said: ‘User protection is an integral part of our DNA and core values. Our vision is to create a sustainable ecosystem that is safe for all participants. In the last four years we have laid the groundwork by investing heavily in security and user protection, supporting law enforcement from around the world with high-profile investigations and helping cybercrime victims recover millions of dollars worth of stolen funds.’”