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Binance Australia CEO: Ramping up measures to protect vulnerable users

Binance Australia CEO: Ramping up measures to protect vulnerable users.

Binance Australia is tightening up its onboarding process for new users as part of a push to protect users flagged as most vulnerable to financial crypto crime.

The new measures were mentioned in Binance Australia’s June quarter Economic, Social, and Governance (ESG) report on Aug. 29, which noted that the exchange was working on a “stringent and user-focused onboarding experience” aimed at groups with a higher occurrence of financial crime.

Speaking with Cointelegraph, Binance Australia CEO Leigh Travers and Zachary Lu from the exchange’s Financial Crime, Risk and Compliance unit noted the company has been actively working on ways to protect “vulnerable users”, — which starts from the onboarding process.

“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,” said Lu.

Binance Australia CEO
Binance Australia CEO

Binance Australia CEO

“We are looking at three main areas: onboarding, ongoing and at the end of the life cycle [the point of time in which someone is scammed].”

Lu outlined that the general type of people Binance has flagged as vulnerable users are the elderly, people that live in remote areas, or those with disabilities. He added that such conclusions resulted from working with various government and research agencies focused on financial crime. 

The duo emphasized that the company is paying a particular focus to investment scams, in which criminals promise inordinate investment returns to dupe people into sending them money.

This scam has cost Australians millions of crypto, with a recent report from Scamwatch estimating that $25 million was lost in the first half of 2021 due to bogus investment schemes.

“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,” Lu noted.

To determine the scope of a new user’s crypto knowledge and to ascertain whether a bad actor has guided them to sign up under pretences, the firm recently rolled out a know-your-customer (KYC) focused quiz that enables them to flag any potentially suspicious activity.

“So in terms of the data there, it’s only recently been implemented. So we don’t have sort of the analysis of how that’s how much that is going to stop. But, this user group was multiple times more likely to fall victim to these types of scams.”

Adding to his point, Travers suggested that many “vulnerable” users generally fall victim to scams within the “first seven-day window” of being onboarded.

As of Sept. 1, Binance Aus will incorporate more stringent identification requirements as part of the user onboarding process.

As such, the firm will require new users to provide a photo of their driver’s license and its number at the time of signing up instead of allowing it to be submitted later.

This will be introduced to enable Binance to promptly verify the legitimacy of ID documents as part of the onboarding process, identify a vulnerable user and also help flag whether someone might be signing up under a stolen ID.

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