Binance's proactive deployment or regulatory pressure? Legal Advisor: BitMEX faced CFTC charges shortly after announcing KYC last year.

Binance recently announced that it will fully implement mandatory KYC on 10/19. Some in the community interpret this as "cooperation will bring about more friendly regulation." However, Compound's legal counsel does not agree. He cites BitMEX as an example, as BitMEX announced the launch of a mandatory KYC program in August last year and was subsequently accused by the U.S. Commodity Futures Trading Commission of operating without registration, violating anti-money laundering laws, and other charges within two months.

Binance Accelerates Comprehensive KYC Progress

Binance previously announced that the daily withdrawal limit for unverified accounts would be reduced from 2 BTC to 0.06 BTC. On 8/20, they further announced that all new users and unverified accounts must complete intermediate verification to access Binance, effective immediately.

Proactive Deployment or Regulatory Pressure?

Compound's legal advisor Jake Chervinsky retweeted a tweet from Binance CEO Changpeng Zhao and pointed out:

BitMEX announced mandatory KYC in August last year. Two months later, they faced criminal charges.

BitMEX announcement last year.

Jake Chervinsky's analogy drew attention from the community, with many believing he was just creating panic. Here is his Q&A with the community:

1. BitMEX did not serve US users, so how were they charged by US authorities?

The US Department of Justice (DOJ) claimed that BitMEX did indeed serve US users, similar charges could be anticipated for Binance.

2. Is it BitMEX itself or the individuals conducting KYC on the platform that faced charges?

The exchange and its executives.

3. BitMEX is different from Binance, this argument is merely FUD.

I'm not saying they are the same, but this is not FUD, it's a fact from past history.

4. Can the charges from the US DOJ be avoided? Is it too late for Binance?

Even if the DOJ has taken action, I'm not sure what their plans are for Binance.

5. You retweeted Binance's KYC tweet and referenced the BitMEX incident, you may not have said it directly, but are you trying to hint that Binance will be charged within two months?

I did not say Binance will be charged within two months. Referencing BitMEX was just a simple historical fact, some interpret Binance's policy as a "friendlier regulatory future," but past cases show this may not be the case, I'm not predicting the future, just considering major news events.

BitMEX Leadership Change

On October 2nd last year, the US Commodity Futures Trading Commission (CFTC) accused BitMEX of operating without registration, violating anti-money laundering laws, and breaching the Bank Secrecy Act, ultimately relinquishing the throne of contract trading leader to Binance.

Recently, BitMEX reached a substantial USD settlement with the CFTC and the Financial Crimes Enforcement Network (FinCEN). Regarding Binance's recent acceleration of comprehensive KYC processes, BitMEX's current CEO Alexander Höptner stated:

This is a positive, proactive step for the crypto industry. Taking on more responsibilities can make the crypto space better, and we welcome others to join our journey.