Binance Urges Prime Brokers to Strengthen Scrutiny Over US Investors to Filter Out from Exchange
In Brief
Binance requested prime brokers FalconX and Hidden Road to strengthen client screening procedures to prevent United States investors from accessing the exchange.
Cryptocurrency exchange Binance has requested prime brokers, such as FalconX and Hidden Road, to strengthen their client screening procedures to prevent United States investors from accessing the exchange. Companies are now requesting a wider range of information from clients, including details about the geographic locations of their offices, founders, and employees. Additionally, they mandate clients to provide attested information to ensure its accuracy.
According to the written statement, Binance is firmly dedicated to compliance and has publicly disclosed its process for evaluating end users who can access the Binance platform. By transparently outlining its standards, the company provides clarity to enterprises seeking access to its market-leading liquidity.
Binance began urging prime brokers to request additional information from their clients around the time when the company pleaded guilty to the United States charges last year.
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Binance Faces Regulatory Challenges
Binance and its former CEO, Changpeng Zhao, acknowledged breaches of the Bank Secrecy Act last year. The DOJ revealed a settlement with Binance concerning allegations of money laundering, fraud, and sanctions violations, leading to the exchange paying a fine of $4.3 billion.
Subsequently, Binance’s United States arm, which faced a lawsuit from the Securities and Exchange Commission (SEC) alongside Binance and Changpeng Zhao, asserted that it had to reduce its workforce by more than two-thirds due to a 75% drop in revenue following the regulatory action.
However, following Changpeng Zhao’s guilty plea and subsequent resignation, the global exchange strengthened, with its total value locked (TVL) rising from $67 billion to $109 billion since November, according to data from DefiLlama. Moreover, Binance remains the largest cryptocurrency exchange globally in terms of trading volume, as reported by CoinMarketCap.
Furthermore, analyzing the recent performance of Binance Chain (BNB), the native token of Binance’s exchange, digital asset traders appear optimistic about the platform’s future.
The cryptocurrency has surged approximately 50% this year, maintaining its upward trend from December up to the present day. It is currently trading at $506.63 and has experienced over a 42% rise over the last 30 days, according to data from CoinMarketCap.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
