The world’s largest cryptocurrency exchange has reportedly lost a significant chunk of potential revenue due to KYC compliance.
What happened: In a recent interview with CoinDeskBinance Compliance Team Tigran Gambaryan and Matthew priceFormer investigators with the US Internal Revenue Service’s cybercrime division said the exchange’s stricter KYC policies have come at the company’s expense.
“We lost 90% of our customers after implementing KYC and lost billions in revenue,” Gambaryan said.
Binance’s compliance manager’s statements came in response to a question about whether the exchange’s decision to lower non-KYC-compliant accounts Bitcoin BTC/USD Withdrawal limits set at 0.06 BTC had led to a drop in illegal activity.
According to Gambaryan and Price, this restriction has resulted in a “big difference” in illegal activity relative to overall transactions.
“Binance is exponentially larger than its competitors. If you use real math, the numbers [of illicit activity] are the same across the industry,” Gambaryan said.
Binance has a trading volume of $14.5 billion, which is way beyond that FTX and Coinbase Global Inc COINwhich have a daily trading volume of $1.3 billion and $1.2 billion, respectively.
In recent years, Binance and its CEO Changpeng Zhao (CZ) have been the subject of several critical media reports of alleged “lax KYC and AML policies.”
Most recently, a Bloomberg Businessweek article reprinted by Hong Kong-based Modern Media prompted CZ to do so file a defamation lawsuit against the publisher.