NEW YORK: 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 say.
Since roughly the period around November’s guilty pleas, the world’s largest crypto trading venue has told prime brokers such as FalconX and Hidden Road, which cater to institutional traders, to demand more information from their clients, the people said, asking not to be identified as the matter is private.
The checks include questions about office addresses as well as where employees and founders are based, and require signed attestations from respondents confirming the accuracy of their replies, two of the people said.
Binance in November pleaded guilty to violations of US anti-money-laundering and sanctions laws and was hit with a landmark US$4.3bil penalty.
The global platform targeted US customers, including valuable traders who deepened liquidity on the exchange, while refusing to comply with the relevant American legislation, the Department of Justice said at the time.
Binance employees “called American VIPs to encourage them to provide information that suggested the customer was not located in the United States,” the Justice Department said in its Nov 21 statement.
Against that backdrop, the crypto industry is alert for compliance-related changes at the linchpin trading venue for digital assets.
For instance, the exchange has tightened requirements for listing new digital tokens, people with knowledge of the matter said.
“Binance is fully committed to compliance and has made public how it assesses end users who can access the Binance platform,” the company said in a statement in response to queries about whether prime brokers have been tasked with stricter checks. — Bloomberg
