Binance To Tighten KYC and Sanctions Screening To Address Exchange’s ‘Risk’

Binance has tapped two firms to help it tackle the potential risk posed by nefarious actors transacting illicitly in crypto

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Binance’s Changpeng Zhao

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key takeaways

  • Data analytics firm Kharon and cloud-native screening provider Neterium will assist Binance in its efforts
  • The exchange says the partnership will complement its existing screening controls for illicit crypto activity including sanctions measures

Cryptocurrency exchange Binance is vying to bolster its know your customer (KYC) controls and sanctions screening via a new partnership aimed at curbing the exchange’s potential risk.

The company said Wednesday it has tapped data analytics firm Kharon and cloud-native screening provider Neterium to further its efforts to detect illegal crypto activity on its platform.

“Working with Kharon and Neterium allows us to leverage Kharon’s best-in-class data with Neterium’s innovative technology to address our risk,” Binance Global Head of Sanctions Chagri Poyraz said in a statement.

The exchange assertd the partnership will complement its existing screening technology, while simultaneously addressing its regulatory requirements. Among those obligations — imposed by regulators worldwide — has been to monitor for and enforce sanctions requirements.

The European Union’s latest round of sanctions, issued last month, includes a series of targeted economic measures with a section aimed at an extended prohibition on deposits to crypto wallets.

Previously hesitant about imposing restrictions on Russians, Binance CEO Changpeng “CZ” Zhao said in an interview with Bloomberg in March his exchange would resist calls to limit services to “normal people.”

A month later, Binance moved to restrict its services to Russian users following the country’s invasion of Ukraine in February and reactionary financial sanctions designed to curb capital flows to Europe’s largest nation. Russian nationals with holdings above 10,000 euros ($10,703) have been limited to withdrawal-only mode.

Binance, which has previously ended up in hot water with regulators over its alleged failure to apply or register for financial services licenses in multiple jurisdictions, appears willing to play ball.

“Virtual asset service providers require the highest quality data and technology to support their compliance programs,” Kharon Chief Client Officer Howard Mendelsohn said. “Partnering with Binance to provide data and analytic tools is a critical development to address expanding regulatory expectations and mitigate risk.”


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