Binance taps Liquid to meet KYC requirements in Japan
Binance has chosen Liquid, a Tokyo-based biometrics firm, as its identity verification partner for its Japanese platform. This partnership will allow Binance Japan to ensure compliance with the nation’s strict know-your-customer (KYC) regulations by utilizing Liquid’s eKYC (electronic know-your-customer) service.
Liquid’s biometric data authentication service employs AI-based image processing to conduct identity checks that adhere to regional KYC rules. This technology helps gather crucial biometric information for KYC procedures, which is required by Bitcoin exchanges in Japan to ensure compliance and security.
Binance is further cementing its re-entry to the Japanese market through this partnership with Liquid. The move is noteworthy as other major exchanges like Coinbase and Kraken have recently halted operations in Japan.
Takeshi Chino, General Manager for Japan at Binance said:”Binance’s robust KYC framework plays a critical role in protecting the platform, users and community, and the entire ecosystem from potential threats. We are excited to launch our Japan platform in a fully compliant manner with stringent and comprehensive eKYC solutions enabled by Liquid. Binance will continue to uphold a high standard of safety and compliance in Japan.”
Binance Japan revealed earlier plans to list 34 tokens and introduce crypto products, including spot trading, Earn products, and an NFT marketplace. The collaboration with Liquid helps Binance meet regulatory requirements and offer a compliant trading environment for cryptocurrency users in Japan.
As per a notice on its website, the new compliant platform will not offer derivative trading and so called “leveraged token” for its customers in Japan. However, Binance aims to work hand in hand with regulatory authorities to meet the necessary requirements and offer derivatives services in a manner that aligns with regulatory standards.
Binance’s global version will no longer accept new derivative accounts from users in Japan. Local residents who are using the global platform will not be able to open or increase options positions and any pending orders will be canceled.
Furthermore, as part of the transition process, Binance will gradually limit the functionality of the global exchange for Japanese users leading up to December 1. After this date, Japanese users who have not completed their Know Your Customer (KYC) verification will only be able to withdraw their assets from the global platform.
Binance made a fresh bid to enter Japan back in November 2022 with the acquisition of Japanese-registered crypto exchange service provider Sakura Exchange BitCoin (SEBC). The financial terms of the transaction were not disclosed.
Binance pulled out of Japan in 2018 after the country’s financial regulator warned that the crypto giant is operating in Japan without permission. At the time, CEO Changpeng Zhao spoke out against rumors that Binance was subject to criminal charges by the FSA. He also claimed that the exchange was in “constructive dialogues” with the regulator over the matter.
Since 2017, Japan has been one of the first nations in the world to make it mandatory for crypto companies to properly register with the regulator in order to continue operating. However, Japanese authorities are proposing new restrictions that would bring crypto exchanges under the purview of its Foreign Exchange and Foreign Trade Act.
