Binance's Overzealous Compliance Efforts Leave Innocent Iranians Out In The Cold: Report

Zinger Key Points
  • Iranian accounts are unnecessarily blocked.
  • Binance seeks to improve compliance efforts.

The biggest cryptocurrency exchange in the world, Binance BNB/USD, has come under heavy regulatory and public attention for a number of reasons, including claims that it continued to do business with clients in Iran despite U.S. sanctions.

What Happened: The company's efforts to increase compliance, it seems, may have resulted in the disabling of accounts for Iranian users who shouldn't have been impacted, The Block reported.

The company's efforts to remove sanctioned customers from its database resulted in the blocking of certain accounts that shouldn't have been affected, according to Chagri Poyraz, Binance's Global Head of Sanctions.

Although Binance improved its compliance since last year, the backlog-clearing process took up to six months. Poyraz believed the problem had essentially been fixed.

Iranian consumers had trouble establishing their legal presence outside of Iran, which prevented them from trading or moving cryptocurrency during that time.

Also Read: Survivor Wallet: The Game-Changing Blockchain Solution For Instant Disaster Relief

Three former customer care agents at Binance asserted the method used to answer calls from the affected Iranian clients was opaque.

Sometimes they were told not to give an explanation for account blocking or money withdrawals.

Why It Matters: According to Poyraz, Binance never aimed to target a particular demographic and based its compliance efforts on customer regions rather than nationalities.

He agreed it was challenging to distinguish between Iranian customers who were compliant and those who weren't because of things such as the purchase of KYC-compliant accounts on the dark web.

Despite these difficulties, Binance was working to increase compliance by bringing on board experts in the fields of government regulation, financial crime detection and anti-money laundering.

Poyraz is convinced Binance is in a better position now because the company's compliance division increased by roughly 650% over the past two years.

Read Next: French Senate Says 'Oui' To Social Media Stars Promoting Crypto On Social Media

Photo: Shutterstock

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: CryptocurrencyNewsGlobalMarketsanti-money launderingBinanceBinance.UScomplianceDark WebIranKYCUS sanctions
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...