Binance instructs prime brokers, such as FalconX and Hidden Road, to collect detailed customer information to strengthen compliance and regulatory initiatives.
Binance reportedly instructed prime brokers to conduct stronger verification measures to prevent US investors from accessing the cryptocurrency exchange.
The repercussions of the plea agreement reached with US authorities last year have prompted this action.
Binance Requests Prime Broker Security Vigilance
Since the time surrounding the guilty pleas in November, Binance has issued directives to prime brokers such as Hidden Road and FalconX, which cater to institutional traders, to gather more comprehensive information from their clients.
The implementation of these guidelines is in line with initiatives to bolster regulatory and compliance protocols.
In addition, the verification process entails requests for information such as office locations, employees, and proprietors.
Furthermore, signed attestations from participants are required to validate the responses’ accuracy.
Binance agreed to comply with United States anti-money laundering and sanctions legislation in November, which led to a significant financial penalty of $4.3 billion.
In addition to failing to comply with pertinent American legislation, the Department of Justice had accused Binance of targeting US clients, including major traders.
As stated by the Justice Department, Binance personnel proactively communicated with VIP clients in the United States, pressuring them to furnish details that would substantiate their non-U.S. residency.
Stringent Monitoring of New Token Listings
In light of this circumstance, the cryptocurrency industry is on the lookout for possible compliance modifications at the critical digital asset trading platform.
For example, as reported by Bloomberg, information from sources with direct knowledge of the situation indicated that Binance has tightened its requirements for listing new digital tokens.
Binance stated, in response to inquiries regarding stricter checks by prime brokers:
“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.”
To provide trading and connectivity services to enterprises, such as brokers, automated trading platforms, and exchanges, the exchange referred to its Binance Link Program.
According to CCData, the platform’s share of global spot crypto trading volumes decreased from nearly 60% to approximately 30% last year, but it has since increased to around 40%.
However, Bitcoin experienced an extraordinary price increase a year ago, which reignited speculative zeal and trading activity in the digital asset sector.
The favorable performance of BNB Coin, the native token of Binance’s exchange, indicates that digital asset traders are optimistic regarding the platform’s future.
Additionally, BNB has increased by approximately 80% this year, outpacing Bitcoin’s growth rate.