Binance to Fully Restrict Unverified Sub-accounts on Exchange Link Program

On April 5, crypto exchange Binance unveiled more stringent Know Your Customer (KYC) measures. Starting from April 20, users who have not submitted the required KYC information will no longer be able to access their sub-accounts created as part of the Binance Link program. This measure will affect the sub-accounts created solely for depositing cryptocurrencies.

The Binance Link program, launched in September 2019, enables enterprises to scale their operations with the help of Binance’s technology. It offers “plug and play API” to various customers, such as asset managers, exchanges, cryptocurrency wallet providers, and trading bots. From now on, Exchange Link account holders must complete KYC verification to continue using the services. Information they may need to provide includes proof of address, source of funds, source of wealth, and so on.

Restricted sub-accounts will be unable to receive deposits, and any misplaced deposits may take up to 45 days to be returned. An administrative fee of $200 or equivalent will be applied per appeal, irrespective of the deposit amount. However, they will be allowed to withdraw their assets. Such users will be unable to place new orders in spot trading, and all their existing orders will be cancelled. In margin and futures trading, the restricted accounts will be unable to place new orders but will be allowed to reduce their existing positions.

Binance has also implemented measures to identify whether a sub-account user is involved in politics. If the users are politically exposed, the exchange mandates that they provide their position and employer details. Furthermore, users connected to a politically exposed person (PEP) must provide information about their relationship with the PEP. The company also mentioned that it could freeze the assets in a sub-account and restrict access for legal and compliance reasons. 

Binance wrote:

“In such cases, Binance may sometimes not be able to provide the Exchange Link account holder or their sub-account users with a detailed explanation for legal and compliance reasons.” 

Regulatory Challenges & BNB Performance

Amidst its efforts to strengthen security measures, Binance finds itself entangled in a maze of regulatory hurdles, especially in Nigeria. The government accused the exchange of money laundering and tax evasion, which led to a ban on its operations. Moreover, Nigerian authorities have detained two Binance executives. This situation shows the complexities of operating in the ever-changing crypto market.

As Binance confronts these challenges, it must carefully balance regulatory compliance with retaining its position as a key player in the market. However, despite the recent positive update, the price of Binance Coin (BNB), the native cryptocurrency of the Binance ecosystem, dropped by 1.86% and was trading at $577 at the time of writing. Its trading volume also fell 1.02% to $2.23 billion. Meanwhile, despite recent losses, the price of BNB has surged by over 37% in the past 30 days.