Binance Employees Allegedly Help Mainland China Residents Avoid KYC Processes To Access Cryptocurrencies

JAKARTA - Demand for risky assets such as Bitcoin is starting to rise amid rising global inflation and fears of a worldwide banking crisis. Although crypto exchanges have been banned in mainland China, residents still want to participate in the global financial revolution.

According to a CNBC report, several Binance employees have shown how to bypass the company's Know Your Customer (KYC) feature to mainland Chinese. They even teach how to fake bank documents and provide evidence of fake physical addresses.

Employees and Angels Binance also advise users to enable their Virtual Private Network (VPN) and register as Taiwanese residents, then transfer their citizenship back to mainland China. This is done so that they can access the Binance app for Android and get Bitcoin and crypto exposure.

Even so, Binance's security was questioned amid Bitcoin's global adoption. Security experts fear terrorism and money laundering could weaken Binance's native customers. They also highlight the convenience for hackers from North Korea to launder money through stolen coins.

Professor Duke University and former head of FDIC innovation, Sultan Meghaji, said he had eight out of 10 concerns about Binance from a regulatory and security perspective.

"If I have eight out of 10 concerns about Binance from a regulatory perspective and from a national security perspective, this brings it to 10 out of 10," said Duke University professor and former head of FDIC innovation, Sultan Meghaji, quoted by CoinSpeaker.

Knowing this, Binance denied claims that their employees helped mainland Chinese residents overthrow existing government laws, suggesting that many people in mainland China are still interested in Bitcoin and crypto.

"We have taken action against employees who may have violated our internal policies, including incorrectly requesting or making recommendations that are not permitted or not in accordance with our standards. We have strict policies requiring all users to pass the KYC by providing their home countries and other personal identification information," the spokesperson told CNBC.

The Bitcoin market has grown significantly despite some restrictions from Mainland China. For example, Bitcoin has been used as legal tender in El Salvador and the Central African Republic.

With the increasing number of states and states recognizing Bitcoin as a digital instrument with intrinsic value, the Chinese government will definitely relax the ban on cryptocurrencies from attracting international investment. However, as long as concerns about security and regulations remain, investors should be careful when considering investing in crypto assets.