Since the crypto ban in China came into effect in 2021, it has been a major limitation for crypto traders who relied on the largest exchange in the world, Binance, to trade. However, it seems like a Binance employee has revealed another way of bypassing this crypto ban in China. Previously, Binance founder Changpeng Zhao said their KYC feature was a billion-dollar effort and was effective enough to prevent China users from accessing the platform.
But a Binance employee has revealed how to bypass China's crypto ban in their forum. A user had asked, "How can mainland users register now?" Then the Binance employee Yaya Z on the forum answered, "Clients need to use a VPN that excludes IP addresses from restricted regions such as the United States, Singapore, and Hong Kong. Then use overseas email (Outlook, Gmail, ProtonMail) to register. Please choose Taiwan as a place of residence; then switch back to China at the authentication phase, then upload the mainland ID card."
This is a major leak, as it will help citizens of countries who are also banned on the platform to bypass the limitation. According to a CNBC report, some techniques which the Binance employee revealed to users involved forging their addresses and some essential documents during KYC. Those working for Binance are not the only ones revealing how to bypass Binance KYC. Users and Binance angels have also made videos showing other users how to bypass the KYC. With these videos, they can easily falsify their addresses and documents and get access to Binance debit cards and other services.
Not only does this process affect Binance security, but those residing in China using Binance services illegally can also face severe legal issues. Those caught in this act can serve many years in prison or pay fines.
Former FDIC chief innovation officer Faults Binance Security
The former FDIC chief innovation officer Sultan Meghji has also spoken about the issue saying that the new revelation raises a grave concern. Sultan Meghji said the flaw in Binance’s KYC and AML makes the crypto exchange less trusted by the government. Meghji noted the US government might be looking into the matter as it is now becoming an issue of national security.
"If I had an eight out of 10 concern about Binance from a regulatory perspective and from a national security perspective, this takes it to a 10 out of 10. I think explicitly about the national security implications of how terrorists, criminals, money launderers, cyber people in North Korea, Russian oligarchs, et cetera, could use this to get access to this infrastructure," Sultan Meghji said.
Binance spokesperson commented on the issue, saying that Binance employees found guilty of revealing such sensitive information will be laid off.
" We have taken action against employees who may have violated our internal policies including wrongly soliciting or making recommendations that are not allowed or in line with our standards. We have strict policies requiring all users to pass KYC by providing us with their country of residence and other personal identification information."
"Binance employees are explicitly forbidden from suggesting or supporting users in circumventing their local laws and regulatory policies, and would be immediately dismissed or audited if found to have violated those policies," the spokesperson added.