Binance is set to re-enter Japan on August 14, partnering with Liquid, an authentication service, to comply with Japan’s KYC regulations. Liquid’s eKYC service, chosen for its identity document imaging and recognition technologies, will enable Binance to carry out detailed identity verification processes. Despite being a critical protocol for preventing cryptocurrency-related crime, the collection of biometric data has faced scrutiny over privacy concerns.
As Binance prepares to re-enter the Japanese market on August 14, it has revealed its partnership with Liquid, a biometric data authentication service. This collaboration aims to meet the regulatory requirements set forth in Japan to operate a cryptocurrency exchange.
According to regulations, cryptocurrency exchanges must adhere to strict know-your-customer (KYC) procedures. This involves implementing detailed identity verification processes and conducting customer due diligence to prevent money laundering.
Japan’s Tight Regulations: The Key Catalyst
Hiroki Hasegawa, CEO of Liquid, explained in the Aug. 10 statement that the eKYC service provides “superior facial recognition and identity document image recognition technologies.”
The statement highlights the adaptability of the service to different regulatory demands between nations, which is significant in the cryptocurrency sector:
“LIQUID eKYC offers top-notch facial authentication through its unique AI-based image processing capability, enabling seamless identity verification in accordance with the respective legal and security framework in each country.”
On May 28, Binance announced that it would discontinue its support for Japanese users on the global platform before November 30. This gives Japanese users time to undertake the KYC process and migrate to the compliant Binance Japan platform.
Takeshi Chino, General Manager of Binance Japan, stated the importance of the platform adhering to Japan’s strict regulatory requirements on KYC, in the following terms:
“We are excited to launch our platform in Japan in a way that is fully compatible with the strict and comprehensive eKYC solutions enabled by Liquid. Binance will continue to maintain a high level of security and compliance in Japan.”
Despite the strict regulations in place, the Prime Minister of Japan, Fumio Kishida, recently revealed that he has high hopes for the web3 industry during a conference:
“I hope that the Web3 industry will regain its focus and vitality and that various new projects will emerge,” Kishida said.
Privacy Concerns with Biometric Technology
KYC serves as a crucial protocol to prevent crypto-related criminal activities. However, the insistence on the collection of biometric data has recently come under scrutiny.
Worldcoin, the cryptocurrency project founded by OpenAI CEO Sam Altman, has come under fire for its use of iris scanning technology.
To register, users must scan their iris in exchange for free Worldcoin tokens and a unique digital identification, called a World ID. This process is implemented to ensure that users are verified as humans and register only once.
However, questions have been raised about privacy concerns and ethical considerations. Basically, Worldcoin is giving people money in order to get access to sensitive data. Rich people can choose to do it or not. Meanwhile, it has proven more attractive to people in third-world countries, including Sudan, Indonesia, and Kenya.
Kenyan authorities reportedly raided Worldcoin’s warehouse in Nairobi on August 2 and seized machines believed to contain stored data.
By Leonardo Pérez
