Binance, the embattled crypto exchange which has been in the news recently for all the wrong reasons, has announced that all the accounts held at the exchange would have to undergo mandatory KYC if they have to use its services.
The exchange has been in trouble in various regions over the lack of regulatory oversight over its operations with many countries like the UK, Malaysia, Hong Kong, and others asking the exchange to shut down its operations. The exchange has received a massive setback as China has also cracked down on its operations and those of other crypto firms as well and the company has been seeing its reliability getting eroded in a very fast manner. The exchange has been scrambling to convince the regulators of its seriousness to adhere to laws and regulations with the appointment of a large number of compliance staff and hiring senior management people who have a strong background in regulation.
On the other hand, it has also been facing a lot of criticism over its shutdown of trading operations during the fall of the crypto prices on May 19. This was the day when the crypto trading ecosystem had one of the largest falls in its prices which led to a liquidation of a very large number of positions in several exchanges, totalling a few billion dollars. But during the time of this fall, the Binance exchange shut down the trading operations as its systems could not cope with the increased volatility and liquidation of positions and it reopened its trading only a couple of hours later when the prices had climbed back to pre-crash levels.
This shutdown was heavily criticised with many users suggesting that it was a result of a sinister scheme to take advantage of the situation rather than a genuine IT-related issue. There are reports that some of these affected users would be launching a case against Binance to seek justice and compensation and in this case, as well, it is likely that its lack of regulatory oversight and compliance and its mode of operating with no specific headquarters or any kind of licensing is expected to come under the spotlight and that could only mean even more trouble for the exchange if and when the cases begin to pile up against it.