Binance Australia has released a blog for the June quarter on its Environmental, Social, and Governance report. However one of the key takeaways from the blog is the exchange’s commitment to protecting vulnerable investors. As per the blog, two major areas of research and development were the adoption of crypto and user protection.
The blog notes that the exchange is developing a strict, user-focused onboarding experience. The move is aimed at demographics that were at a higher risk of being exploited.
Leigh Travers, CEO of Binance Australia spoke to CoinTelegraph and said that the company is actively working on protecting vulnerable investors. The steps involved will begin right from the onboarding process for new users.
Additionally, Zachary Lu, who works at Binance’s Financial Crime, Risk and Compliance unit, stated,
“From the whole financial management perspective, we are really looking at it from end to end and also from a whole life circle’s perspective.”
Who according to Binance are “vulnerable users”?
According to Lu, older citizens, people residing in distant locations, and individuals with impairments are the typical demographics that Binance has identified as vulnerable consumers. Moreover, he stated that reaching these conclusions required collaboration with governments and research organizations that study financial crime.
Moreover, Lu and CEO Travers both stressed that the business is paying special attention to investment scams. These are cases in which fraudsters offer investors extraordinarily high returns in exchange for their money.
Lu stated that,
“There are 500 different scams, but investment scams are always on the top of it. So this is not exclusive to crypto scams to be honest, but investment scams overall ranked number one for a long, long time.”
Binance recently started implementing a know-your-customer (KYC) quiz to better understand and flag suspicious users.
Furthermore, Binance Australia has presented the Treasury with a thoughtful recommendation on licensing and custody criteria for crypto exchanges. The move is a sign of commitment on the exchange’s part to collaborate with policymakers and regulators.
According to Travers, a large percentage of vulnerable customers are typically conned during the “first seven-day window” after being onboarded. As part of the user onboarding process, Binance Australia will begin implementing more severe identity requirements from September 1st.
As a result, the company will no longer permit new users to submit their driver’s licenses at a later time and will instead ask them to submit a photo and their license at the time of registration.