Binance Asks Prime Brokers to Enhance KYC to Block U.S. Nationals: Bloomberg (2024)

FAQs

Binance Asks Prime Brokers to Enhance KYC to Block U.S. Nationals: Bloomberg? ›

Binance is now requiring prime brokers to enhance their KYC to block U.S. nationals, according to a Bloomberg report. In court documents unsealed in November, it was revealed that U.S. customers significantly fueled Binance's rapid growth.

Global cryptocurrency exchange Binance has requested prime brokers, such as FalconX and Hidden Road, to ramp up their screening processes of clients to prevent having U.S. investors on the exchange, Bloomberg reported on Tuesday, citing people familiar with the matter.

Binance has asked prime brokers to run more stringent checks to keep US investors off the crypto exchange in the fallout from last year's plea deal with the nation's authorities, people with knowledge of the matter said.

Binance enforces strict KYC requirements for sub-accounts to boost compliance. Unverified sub-accounts risk losing Binance Link Program access. Communication solely with Exchange Link holders underscores user responsibility.

Binance has implemented a Secure Asset Fund for Users (SAFU) to further protect its users' funds. The SAFU is a reserve fund that Binance allocates for emergency situations, such as a hack or security breach.

A broker facilitates the trading of securities, such as the buying or selling of stocks for an investment account. A prime broker, instead, is a large institution that provides a multitude of services, from cash management to securities lending to risk management for other large institutions.

Prime brokerage is designed to be a low-risk activity, but wrong-way risk (WWR), the opaqueness of funds' positions and poor risk management can create vulnerabilities for PBs.

Is Binance banned in the US? No, but you can't use Binance fully in the US because it uses securities not registered with the Commodity Futures Trading Commission. Binance.com stopped accepting US residents in 2019. Still, US residents can trade on Binance.US, which offers 150+ cryptocurrencies.

A prime brokerage goes beyond just execution but provides a suite of services that enable large institutions, traders, hedge funds to implement their trading strategies at a cost. Prime brokers typically don't provide execution of trades but often times will have inhouse execution services within the same institution.

About Binance.US

Binance is the largest crypto exchange on the planet, but U.S. customers cannot trade on the platform. Instead, they are pointed toward Binance.US, which is available to residents of most, but not all, U.S. states.

Can I withdraw from Binance without KYC? ›

Binance users must complete these checks if they want to trade crypto, deposit and withdraw funds, or access our vast ecosystem. Those who don't complete verification will only have basic access to the Binance site.

Binance US requires new users to provide an SSN for regulatory reasons and to help prevent fraudulent activity. Binance assures users that it does not store their social security number details, though some users are uncomfortable sharing them.

You'll Need to Provide:

Your Full Legal Name & Date of Birth. Your SSN (Social Security Number) for Verification Purposes.

Best for Advanced Traders: Kraken

Kraken has been around for a while now, and is well known — and loved — by many crypto traders around the world. The exchange supports more than 230 cryptocurrencies and boasts arguably the safest digital ecosystem for trading your crypto.

Which Should I Choose - Coinbase or Binance? Coinbase is the best choice for investors due to its beginner-friendly features, stellar reputation, and commitment to regulatory compliance. Recently, Binance faced a major scandal after money laundering charges and the resignation of CEO Changpeng Zhao.

Prime brokerage services are provided by most of the largest financial services firms, including Goldman Sachs, UBS, and Morgan Stanley, and the inception of units offering such services traces back to the 1970s.

Binance Holdings Ltd., branded Binance, is a global company that operates the largest cryptocurrency exchange in terms of daily trading volume of cryptocurrencies. Binance was founded in 2017 by Changpeng Zhao, a developer who had previously created high-frequency trading software.

Prime brokerage is a set of services offered by large financial institutions to investment clients. As a prime broker, the financial institution acts on behalf of the client to complete investment transactions for the client. A brokerage offers a variety of services, operating in all parts of the financial markets.