Until now, the exchange has allowed American users to access its platform. A US resident just had to click the "I'm not [American]" button to create an account on Binance.com.
Binance currently sends emails to US residents based on their IP addresses.
"We noticed that your account may be linked to an IP address from the United States. In accordance with regulatory requirements we are unable to provide services to citizens or residents of the USA […] If you are a us citizen or resident, withdraw your assets from your account within 90 days. We recommend that you consider using Binance U.S. or other platforms in the United States, " the letter says.
Binance took these steps after the US government launched two lawsuits against the BitMEX crypto derivatives exchange.
the feds just came after bitmex for letting in americans
through VPN. binance meanwhile hasn't even been blocking american IP addresses all this time. interesting.
this piecemeal move at least indicates they don't intend to stop allowing unverified accounts for a while. the crypto wild west is still alive, just barely.
i came across an interesting article detailing binance's compliance strategy:
https://www.forbes.com/sites/michaeldelcastillo/2020/10/29/leaked-tai-chi-document-reveals-binances-elaborate-scheme-to-evade-bitcoin-regulators/?sh=698480312a92The leaked Tai Chi document, a slideshow believed to have been seen by senior Binance executives, is a strategic plan to execute a bait and switch. While the then-unnamed entity set up operations in the United States to distract regulators with feigned interest in compliance, measures would be put in place to move revenue in the form of licensing fees and more to the parent company, Binance. All the while, potential customers would be taught how to evade geographic restrictions while technological work-arounds were put in place.
Notably, the document explicitly calls for the “strategic” use of virtual private networks (VPNs) that obscure traders’ locations as a way to evade regulatory scrutiny by the SEC and the NYDFS. In addition to a guide to using VPN’s on Binance’s website, CZ has in multiple instances advocated for VPN use as a way to obscure a user’s location. In a June 2019 tweet he wrote that VPNs are “a necessity, not optional.”
Forbes has learned that the Tai Chi document is currently circulating among law firms, accounting firms and others associated with Binance, and there is speculation that the FBI and the IRS may be investigating. When reached by telephone, an FBI agent in the Washington, D.C .field office initially denied knowledge of Binance and hung up. Later, the agent formally issued a “no comment.”
