Binance stands out as one of the most widely utilized platforms for cryptocurrency exchange globally. Its significant transaction volume, amounting to billions of dollars, has drawn attention from governments worldwide, particularly those responsible for upholding financial system integrity.
Despite its touted benefits, such as advocating for blockchain technology and user freedom, access to Binance has been restricted in prominent democratic nations like Canada, the Netherlands, the USA (resulting in the establishment of a separate platform dedicated to the country), and Malaysia.
Why is this the case? Why do these countries perceive Binance as a threat to national security and financial stability?
Facilitation of money laundering: The cryptocurrency movement, often championed as an alternative to traditional financial systems by some libertarians, raises concerns for governments regarding oversight. Binance and similar platforms often fall short of Anti-Money Laundering (AML) and Know Your Customer (KYC) compliance, providing an ideal channel for individuals with illicit funds to launder money or engage in illegal transactions. Notably, Bitcoin is frequently favored by those involved in criminal activities, such as kidnapping.
Risk to citizens: Countries discourage platforms facilitating cryptocurrency trading for reasons akin to the tight regulation of gambling and other high-risk financial activities. Cryptocurrency markets are volatile, expose users to scams, and lack investor protections found in traditional financial markets. Governments cannot endorse platforms that flout regulations and pose risks of financial ruin for millions, siphoning wealth from the economy and leaving numerous financially distressed citizens in their wake.
While the idea of a utopian realm with unrestricted financial flows may entice those viewing governments as adversaries to be distrusted, such a scenario would breed chaos, rampant criminality, and financial instability. Consequently, Binance, which operates within regulatory grey areas, remains unpopular with governments committed to maintaining market integrity and financial system stability.
