Binance Australia is making it harder for new users to join in order to protect those who are most likely to become victims of financial crypto crime.
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The new measures were mentioned in Binance Australia’s Economic, Social, and Governance (ESG) report for the June quarter, which was published on August 29. The report said that the exchange was working on a “rigorous and user-focused onboarding experience” for people who commit financial crimes more often.
In an interview with Asian Trade, Binance Australia CEO Leigh Travers and Zachary Lu from the exchange’s Financial Crime, Risk, and Compliance team stated the firm has been actively looking into measures to safeguard “sensitive consumers,” beginning with onboarding.
“From the standpoint of financial management as a whole, we are looking at it from beginning to end and also from the perspective of the entire life cycle,” added Lu.
“We are focusing on three primary areas: onboarding, continuing, and towards the conclusion of the life cycle [the point at which a customer is defrauded].”
Lu explained that the majority of the vulnerable users identified by Binance include the elderly, those living in distant places, and those with impairments. He said that these results came from working together with a number of government and research groups that study financial crime.
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The duo noted that the organisation is paying special attention to investment scams, in which criminals offer excessive returns on investments in order to deceive victims into sending money.
This kind of fraud has cost Australians millions of dollars in cryptocurrency. A recent analysis from Scamwatch suggests that $25 million was lost to fraudulent investment schemes in the first half of 2021.
“There are 500 distinct types of fraud, but investment fraud is consistently at the top. Consequently, this is not exclusive to crypto fraud, but investment scams have been number one for a very long time, “Lu observed.
The company has just launched a know-your-customer (KYC) exam that enables them to detect potentially suspect conduct based on a new user’s crypto expertise and whether or not they were lured to sign up under false pretences by a bad actor.
“In regards to the data, it was only recently deployed. Therefore, we do not have an appraisal of how much that will be stopped. However, this user group was far more prone to falling for these sorts of frauds. ”
Travers said that a large percentage of “susceptible” individuals typically fall prey to fraud within the “initial seven-day window” after being onboarded.
Binance suspended a $1 million business account at the behest of law authorities.
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As of September 1, Binance Australia will implement stricter identity requirements as part of its onboarding procedure. Because of this, the company will now ask new customers to give a photo of their driver’s licence and its number when they sign up, instead of letting them send this information later.
This will be done so that Binance can quickly check the validity of ID papers as part of the onboarding process, find a user who might be vulnerable, and help warn if someone is trying to sign up with a stolen ID.
