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As Binance prepares to re-enter the Japanese market on Aug. 14, it has disclosed its partnership with Liquid, a biometric data authentication service. This collaboration aims to meet the regulatory requirements established in Japan for operating a cryptocurrency exchange.
According to the regulations, cryptocurrency exchanges must adhere to strict know-your-customer (KYC) procedures. This involves implementing detailed identity verification processes and conducting due diligence on customers to prevent money laundering.
Japan’s Strict Regulations: The Key Catalyst
Hiroki Hasegawa, the CEO of Liquid, explained in the Aug.10 statement that the eKYC service provides “superior facial recognition and ID document image recognition technologies.”
The statement notes the service’s adaptability to varying regulatory demands among nations – which is significant in the crypto sector.
LIQUID eKYC offers top-in-class facial authentication through its unique AI-based image processing capability, enabling smooth 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 by Nov. 30. This allows time for Japanese users to undertake the KYC process and migrate to the regulatory-compliant Binance Japan platform.
Takeshi Chino, General Manager for Binance Japan, stated the importance of the platform adhering to Japan’s strict regulatory requirements on KYC.
“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.”
To Learn More About Binance Smart Chain (BSC), Read BeInCrypto’s Guide: Binance Smart Chain (BSC): A Beginner’s Guide
Despite the strict regulations in force, Japan’s Prime Minister, 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 attention and vitality, and that various new projects will be born,” Kishida stated.
Privacy Concerns with Biometric Technology
KYC serves as a crucial protocol for preventing crypto-related criminal activities. However, the insistence on biometric data collection has come under scrutiny recently.
Worldcoin, the cryptocurrency project founded by OpenAI CEO Sam Altman, has encountered criticism due to using iris-scanning technology.
In order to register, users must scan their iris in return for free Worldcoin tokens and a unique digital ID, referred to as a World ID. This process is implemented to ensure users are verified as human and sign up only once.
However, questions have arisen regarding privacy concerns and ethical considerations.
Basically, it’s paying people to gain access to sensitive data. Wealthy people can choose to do it or not. Meanwhile, it has proven to be more appealing to people in third-world countries, including Sudan, Indonesia, and Kenya.
Authorities in Kenya reportedly raided Worldcoin’s Nairobi-based warehouse on Aug. 2, seizing machines believed to contain stored data.