Binance Korea will be using an anti-money laundering solution developed by Coinfirm, as the country requires a high level of regulatory compliance for crypto.
Binance Korea will be monitoring activity on its platform for signs of money laundering thanks to a solution developed by Coinfirm.
The partnership, announced on June 1, will help Binance’s Korea branch remain compliant with Anti-Money Laundering (AML) regulations resulting from the Financial
Action Task Force’s (FATF) Travel Rule.
Coinfirm provides a blockchain-agnostic AML platform offered to various institutions dealing with cryptocurrencies. Their previous clients include European banks, blockchain projects like XRP and RSK, custodians like Xapo, and the government of Gibraltar.
As Cointelegraph previously reported, Binance already integrated Coinfirm’s solution on its main platform back in October. Nevertheless, the main Binance platform generally maintains a minimal compliance burden, with the exchange preferring to open distinct branches in countries where this approach may not work, like the United States.
What changes in Korea?
This is the first usage of Coinfirm’s compliance solution on a national Binance platform, less than two months after the platform’s launch.
Korea has taken a strict regulatory approach to cryptocurrencies. A recently unveiled report suggests that the country’s financial watchdog was concerned about money laundering with crypto since 2017, which motivated its tough stance the following year.
The country introduced a bill in March that would see crypto exchanges acquire permits to operate. Binance’s competitor Bithumb already integrated a similar compliance solution in response to the law.
It is unclear how the Coinfirm integration will be felt by the exchange’s end users. Grant Blaisdell, co-founder of Coinfirm, told Cointelegraph that the suite allows for real-time monitoring, which can be used as a basis to block certain funds, like those coming from hacks, he said. Concluding, he added:
“At the end of the day it’s up to Binance’s compliance team what they do action wise with the data and results they’re provided.“
It’s worth noting that Binance Singapore had previously frozen a user’s account for using CoinJoin’s privacy protocol before depositing. This was motivated by the country’s strong AML regulations, which viewed CoinJoin as a risk factor.