Binance has decided to add more layers of security over the management of accounts on its platform. The exchange’s decision comes after internal analyses showed that some of its features and services were being exploited to fetch unfair advantages, such as a better fee rate and higher API limits. Binance has planned to incorporate several steps to make its platform safe for users to engage with cryptocurrencies. The exchange has recently had run-ins with the law enforcement authorities of more than one country, making it reassess its user-friendliness and look for improvements that it can bring to its services.
Binance explains its exploitation
Bad actors have been flocking to exploit cryptocurrencies, mainly because these digital assets can process instant transactions, local and cross border, offering anonymity to the parties involved. Governments around the world are concerned about the misuse of crypto tokens to facilitate unlawful transactions linked to terror financing and money laundering.
Detailing the findings of its own analysis, a blog by Binance said, “Our platform offers various account types, including sub-accounts, managed sub-accounts, and fund manager accounts, which all play an important role in diverse genuine use cases. However, these features also have the potential to be misused by bad actors that seek to circumvent our controls to either access or sell access to a better fee rate and higher API limits.”
To ensure its account features are not being misused, Binance claims to have enhanced the monitoring of all account usage and related activities from a technological standpoint.
“We will investigate all potential or suspected incidents of misuse and, if necessary, take action that we consider appropriate to remedy misuse, which may include, but not limited to, suspension or termination of the relevant accounts,” the post added.
Binance offers rewards to encourage users to report misuse
In December 2023, Binance had claimed that it surpassed over 170 million users on its global network.
In order to catch financial miscreants misusing its platform, Binance has called out to its users asking them to be vigilant. The exchange is offering rewards for reporting potentially suspicious account holders.
“We will provide a reward for any verified case of account misuse. The reward amount will be determined on a case-by-case basis. Your support can make a significant impact and help improve our platform. These efforts are crucial to further enhancing and safeguarding the integrity of our platform,” the exchange noted.
Recently, Binance was fined $2.25 million (roughly Rs. 18.8 crore) in India for reportedly not adhering to the Prevention of Money Laundering Act, 2002 (PMLA). The crypto exchange has previously also had encounters with the American and Nigerian authorities over alleged non-compliance of their respective rules overseeing the crypto sector.