Major crypto exchange Binance took a compliance-friendly approach to its concern after years of a cat-and-mouse game with regulators around the world, and information technology worked surprisingly well in terms of user retentivity, according to a new interview with Binance CEO Changpeng Zhao.

Speaking to Bloomberg News, Zhao noted that Binance made Know Your Customer (KYC) processes mandatory "for global users, for every feature" in a bid to concenter new users as a regulatory-compliant business organization. He revealed that Binance lost nigh iii% of the users after making KYC obligatory.

Binance didn't immediately respond to Cointelegraph's request for confirmation.

KYC is a common practice used by crypto exchanges and traditional financial institutions. It enables companies to verify a user'southward authenticity by requesting some form of real-world identification. Binance made KYC an obligation for all of its existing and new users on Aug. 20 to access its products and services such as cryptocurrency deposits, trades and withdrawals.

"We feel that beingness compliant volition allow more users to use u.s.," Zhao said, adding that nigh people do feel more comfortable using a licensed exchange.

Binance touted its decentralized, no-concrete-headquarters structure for years until Zhao announced in July that the crypto substitution was ready to work with local regulators by proverb, "We desire to be licensed everywhere. From now on, we're going to be a financial institution."

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In his interview, Zhao said that, while regulators were initially skeptical nearly Binance, their attitudes have changed equally the communications continued. "When people run into me in person, they say, 'look, CZ is very reasonable, very calm, non a crazy guy.' So that helps establish their trust much faster," he added.

Binance recently established three subsidiaries in Ireland as part of Zhao'south vision to ready upwardly formal headquarters in different regions worldwide. "When nosotros first started nosotros wanted to embrace the decentralized principles, no headquarters, piece of work all around the world, no borders", Zhao then said, adding, "It'southward very articulate at present to run a centralized exchange, you need a centralized, legal entity structure behind it."