Is Privacy Above All? CEO Binance commented on blocking withdrawals to Wasabi wallets

The head of the Binance cryptocurrency exchange, Changpeng Zhao, published a post in which he commented onblocking the withdrawal of funds, which was announced the day before by one of the users of the privacy-oriented bitcoin wallet Wasabi Wallet.

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According to Changpeng Zhao, commentsThe community’s representatives, for a record of a user who has encountered a problem on Twitter, for the most part say that many do not fully understand all the subtleties of regulating the cryptocurrency industry, including in terms of procedures such as KYC and AML, and how they apply to various types of exchanges .

“Situations may differ from country to country, butThere are two main and generally universal requirements for most regions &#8212; KYC and AML. KYC means that the exchange must know its client, and for this reason it asks for your ID, proof of residential address, etc. AML (anti-money laundering) means that the exchange must analyze every transaction and be sure that it is not related to money laundering, sanctions or fraud,”&#8212; writes Changpeng Zhao.

Speaking about KYC and AML, the head of Binance recalls the existence of specialized analytical services with which both exchanges and regulators work.

“In the world of fiat, banks require information onorigin of funds, address of residence, etc. In the world of cryptocurrencies, service providers analyze on-chain transactions and assign various risk assessments to various transactions. Most regulators require exchanges to use the services of such third-party service providers. Many users do not understand this and blame the exchange. ”

Further, Changpeng Zhao lists various types of exchanges- regulated, that is, those that operate in accordance with the laws of a particular jurisdiction, unregulated - those that do not have a specific jurisdiction and, as a result, are not subject to clear regulatory rules, and, finally, decentralized exchanges.

And since most regulators set AML standards above privacy, users have a choice:

1) Use the services of regulated exchanges, realizing the inevitability of AML-procedures by analogy with banks

2) Use the services of unregulated exchanges, knowing the risks associated with this.

3) Use the services of decentralized exchanges, which usually have low liquidity and do not have access to fiat transactions.

“If you are seriously concerned about your privacy, you should consider using anonymous coins, the very name of which fully speaks for itself,”&#8212; Changpeng Zhao emphasized.

Regarding Binance directly, he notedthat to date, we are no longer talking about just a company or one centralized exchange. The Binance brand is used by several regulated fiat-enabled exchanges, including Binance Singapore, Binance.US, Binance Jersey, etc. All of them operate independently of the global Binance.com platform and are subject to regulatory rules in their respective jurisdictions. There is also a Binance DEX running on Binance Chain's own blockchain.

“At Binance, we are committed to offeringusers have the opportunity to choose and have different levels of privacy. We live in an imperfect world, and every choice means certain compromises. Therefore, it is important to understand the choices we have and the world we live in... We believe that privacy is a fundamental human right and support initiatives related to it,” &#8212;Changpeng Zhao added.

Meanwhile, regarding the situation where BinanceSingapore has blocked the withdrawal of funds to the Wasabi wallet using CoinJoin coin mixing technology, ForkLog editors received a separate comment from Binance SG.

“Binance SG works according to the requirements,presented by the Monetary Authority of Singapore (MAS) and its partner represented by Xfers. For this reason, AML rules apply to the exchange. Unfortunately, the mentioned user has activated one of the risk control mechanisms and therefore we are conducting a more in-depth investigation. We have already contacted this user to explain what happened to him and we hope for an early resolution of the situation. "

At the same time, a representative of the PR departmentBinance Katie Zhu told ForkLog that she did not have information that in the recent past the company had planned to invest in Wasabi Wallet, as Adam Fichor, the main wallet developer, said this the day before.

The story on this, however, is far from over. As the famous bitcoin evangelist Max Hillebrand wrote earlier today, it is already known about the second case of blocking the withdrawal of funds on Wasabi Wallet.

So, he gives a copy of the letter in which BinanceSG reports that, although it takes care of user privacy, “it does not tolerate transactions directly or indirectly related to gambling, p2p transactions, and especially darknet and mixers”

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Further in the letter there is an extremely strange, to ourlook wording. According to it, if analytical services reveal that transactions are associated with the activity listed above, the user’s account is blocked, and he himself is given 72 hours to provide a statement that in the future he will not use such services&#187;.

ForkLog continues to monitor developments.