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Binance Slapped with lawsuit over claims of facilitating money through KYC services 

 
Binance Slapped with lawsuit over claims of facilitating money through KYC services 
Exchanges / Breaking News

Quick Take

1 minute read

  • Know your customer requirements for Binance are currently being targeted by the current owners of a Japanese crypto platform, Zaif. 
  • Industry veterans will know that this platform got hacked not two years ago.

Know your customer requirements for Binance are currently being attacked by the current owners of a Japanese crypto platform, Zaif. Industry veterans will know that this platform got hacked not two years ago.

According to plaintiffs, the weak KYC requirements and the high daily limit facilitated the laundering of $60 million stolen from the Japanese platform. This month, a lawsuit was filed in the northern district of California by representatives of Fisco crypto platform which was quick to acquire Zaif not long after they had taken place. 

The platform is accusing the biggest crypto exchange of helping launder $9 million in cryptocurrency and as a result, they are wanting compensation for these claimed losses.

A significant portion of the case document seeks to demonstrate why Northern California is the proper jurisdiction for suing Binance, which has a globally distributed team and is likely to be legally based in a tax haven country.

Interestingly, a significant amount of the document looks into why Northern California is the correct location for suing the exchange. The first line of the argument is that the servers for Binance are located in California because it uses Amazon Web services. 

The arguments further goes on to highlight that the platform uses Californian based custodians for cold storage with this claim coming from reports that the exchange required Swipe. However, there are no indications as to which service is particularly used by the exchange itself and even further reports indicate that it could be developed in-house anyway.


It will be interesting to see how this situation plays out. For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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