Binance cryptocurrency exchange said on Friday it will require more checks to prevent money-laundering.
The checks will be stricter and run in the background.
This move is effective immediately, as regulators pressured the platform for weeks.
Binance is the biggest cryptocurrency platform.
Hence, the platform faced business restrictions and received warnings from financial monitors in Britain, Germany and Japan.
The monitors have worries over misusing the platform for money laundering and risking other traders.
The Binance holding company’s registration is in the Cayman Islands.
It has reduced its product offers and sought to improve relations with the regulators.
US Treasury Secretary Janet Yellen and European Central Bank President Christine Lagarde raised concerns over crypto money-laundering.
Furthermore, other regulators were particularly concerned with Binance.
The Dutch Central Bank said on Monday, the platform processed $455 million worth of spot transactions in July.
Yet, it was not compliant with the anti-money-laundering and anti-terrorism financial laws.
Their website is now updated with a phrase saying users will have to finish a verification test to get access.
Users who fail to verify themselves can only withdraw funds, cancel orders, and close positions.
This move presents a significant change in how Binance operates.
Previously, the platform only required an ID check for high-limit trading users.
Whereas now, all users must provide an ID, driver’s license or passport, the platform said.
Watchdogs all over Binance
Changpeng Zhao, Binance’s CEO, tweeted linking to the company’s announcement, “Actions speak louder than words.”
“We aim to work more collaboratively with policy-makers to improve global standards and discourage bad actors,” he added in another statement.
The platform said it had assigned the former US Treasury Criminal Investigator as its money-laundering reporting officer.
Nevertheless, some lawyers doubted whether this move to tighten measures would satisfy regulators.
Alireza Siadat, partner at law firm Annerton, said financial monitors need to know who runs the know-your-customer process.
He added, the monitors need to analyze and check if the process follows local laws.
“It is a nice marketing statement, but from the regulators’ perspective, this is not enough,” Siadat said.
According to the British court and Malaysia’s watchdog, Binance’s corporate structure is questionable, although its holding company is in the Cayman Islands.