Binance witnessed a slew of ups and downs over the last couple of months. With expansion on its cards, the world’s largest crypto exchange managed to bag licenses to operate across the globe. Amidst this, Reuters went on to accuse the exchange of being a hotbed for illicit activity.
Additionally, the exchange was called out for having connections with Hydra, a Russian darknet market. While the exchange denied these rumors, Binance’s compliance officers Tigran Gambaryan, Matthew Price, and Chagri Poyraz elaborated on how exchanges couldn’t control the money that was going in. In addition to this, they spoke about the controversial decline in the 2 BTC withdrawal limit.
Back in August 2021, Binance minimized the daily Bitcoin withdrawal limit from 2 BTC all the way to 0.06 BTC. This, however, was limited to unverified users or non-KYC accounts. The exchange did so to reduce the number of illicit activity that was taking place.
Elaborating on the same, Gambaryan who was previously working with the U.S. Internal Revenue Service’s cybercrime unit said,
“I’ve commissioned something for the investigations team to do: What is the effect of 2021 and when this thing started compared to the past 6-8 months? There is a huge difference [in amount of illicit activity], not only in deposits, if you look at a total percentage of transactions. Binance is exponentially larger than its competitors.”
Noting how initiatives like this would change the face of illicit activity, Gambaryan pointed out that Binance wasn’t a den of criminal activity. In addition to this, he revealed that there were several exchanges that continued “to do business with them.” He added,
“There are other exchanges that continue to do business with them. We have lost 90% of customers after implementing KYC, losing billions in revenue.”
Binance’s founder CZ pours cold water on these claims
Losing 90 percent of users over the implementation of KYC looks significant and concerning. Changpeng Zhao, the CEO of the exchange went on to call out other media outlets for misquoting Gambaryan.
CZ said,
“It’s a complete mis-quote. Look at the numbers…But the fact is, this type of headlines sell more clicks… Sad, but true.”
Additionally, the compliance officers of Binance spoke about CZ and his cooperation with them. Chagri Poyraz pointed out how the CEO would never “do the wrong thing.” Gambaryan further noted how Binance was a small company and it grew to become a massive platform in the crypto-verse. He said,
“I can’t defend anything that happened before. We are here to fix those issues. I know for a fact that CZ has made decisions that have cost [Binance] a ton of money. We out-platformed accounts that had millions of users on them because of those risk-based decisions. Because it was the right thing to do. It cost billions of dollars, but he did it.”
Binance, the world’s largest cryptocurrency exchange garnered immense support following Reuters’ article. Several noted how CZ had been trying to do everything to be compliant with regulations. The compliance officers that Binance hired previously served the IRS. Poyraz formerly an HSBC sanctions expert seconded this.