Binance is the world’s biggest cryptocurrency exchange, handling $490 billion of spot trading volumes in March 2022.
Akio Kon | Bloomberg | Getty Images
Binance is the world’s largest crypto exchange by volume and assets, processing $9.5 trillion worth of trades in 2021 alone. But it’s not supposed to be allowed to operate in China, which banned cryptocurrency trading in 2021.
Binance founder Changpeng “CZ” Zhao has touted the exchange’s know-your-customer systems, known as KYC, as a billion-dollar effort. Among other functions, they are supposed to stop customers that aren’t supposed to be on the platform, including residents of China.
But customers in China and around the world regularly subvert Binance’s controls to hide their country of residence or origin, messages in Binance’s official Chinese-language chatrooms show.
CNBC obtained, translated and reviewed hundreds of messages from a Discord server and Telegram group which are controlled and operated by Binance. More than 220,000 users were registered across both groups, which were freely accessible to anyone who registered and joined. Until late March, there were no controls on access, which is how CNBC was able to review messages from 2021 to 2023.
The messages CNBC reviewed come from accounts identified as Binance employees or Binance-trained volunteers known as “Angels.” In these messages, they shared techniques that can be used to evade Binance’s KYC, residency, and verification systems.
Some of the techniques that employees and volunteers have shared involve forging bank documents or offering false addresses. Others involve simple manipulation of Binance’s systems.
Employees, volunteers, and customers also shared video guides and documents that showed mainland residents how to falsify their country of residence in order to obtain Binance’s debit card, which would effectively turn their Binance crypto into a conventional checking account.
Whatever the method, Binance’s Chinese users take on a significant risk: In China, crypto exchanges have been outlawed since 2017, while crypto itself was outlawed in 2021. Many of the products that Chinese residents seek access to are also illegal under Chinese law.
The techniques shared with and among customers also call into question the effectiveness of Binance’s anti-money laundering efforts. For international businesses like Binance, KYC and anti-money laundering efforts are critical in ensuring customers aren’t engaged in illegal activity, like terrorism or fraud.
Experts in financial regulation shared concern that Binance’s KYC and AML efforts can be so easily thwarted.
“If I had a eight out of 10 concern about Binance from a regulatory perspective and from a national security perspective, this takes it to a 10 out of 10,” Duke University professor and former FDIC chief innovation officer Sultan Meghji told CNBC.
Meghji’s concerns about the laxity of Binance’s enforcement of KYC guidelines extend beyond China. “I think explicitly about the national security implications of how terrorists, criminals, money launderers, cyber people in North Korea, Russian oligarchs, et cetera, could use this to get access to this infrastructure,” he said, referring to some of the techniques described.
Wells Fargo anti-money laundering executive Jim Richards agreed that the techniques for bypassing Binance’s KYC controls could have implications beyond China. “What about North Korean customers, or Russian customers, or Iranian customers?” Richards asked.
When reached for comment on the findings in this article, a Binance spokesperson told CNBC, “We have taken action against employees who may have violated our internal policies including wrongly soliciting or making recommendations that are not allowed or in line with our standards. We have strict policies requiring all users to pass KYC by providing us with their country of residence and other personal identification information.”
The spokesperson added, “Binance employees are explicitly forbidden from suggesting or supporting users in circumventing their local laws and regulatory policies, and would be immediately dismissed or audited if found to have violated those policies.”
CNBC also reached out to the Binance employees and Angels named in this article. One told CNBC to contact Binance’s PR team. The rest did not reply.
Public compliance, private evasion
In 2021, after China banned cryptocurrency, Bloomberg reported that Binance had stopped letting Chinese mobile phone numbers register. The company told Bloomberg that it had blocked Chinese IP addresses as well.
But Chinese customers have continued to seek ways to trade on Binance, which include using instructions provided by employees and volunteers. In some cases, these instructions rely on virtual private networks, or VPNs, software that can disguise the user’s location and send messages through the Chinese Internet firewall.
In May 2022, in a support channel on Binance’s Discord server, a user asked “How can mainland users register now?”
A person using the handle Yaya and identifying as a Binance employee told them to activate their VPN and register as a Taiwanese resident, then switch their nationality back to China. The employee also suggested avoiding using VPN nodes in the “United States, Singapore, and Hong Kong.” Binance officially restricts access to certain products in those countries.
Messages obtained by CNBC from Binance’s Chinese-language Discord server.
CNBC
User #1: How can mainland users register now? yaya.z: [How to register for mainland clients]: Clients need to use a VPN that excludes IP addresses from restricted regions such as the United States, Singapore, and Hong Kong. Then use overseas email (Outlook, Gmail, ProtonMail) to register. Please choose Taiwan as a place of residence; then switch back to China at the authentication phase, then upload the mainland ID card.
There are steps that exchanges can and should take to prevent VPN use, said Neel Maitra, a partner at law firm Wilson Sonsini and a former SEC senior special counsel for cryptocurrency issues.
“Most best practices by exchanges also account for common evasive behaviors,” Maitra told CNBC. “While it is true an exchange cannot necessarily prevent or effectively police all possible forms of evasion, I think most regulators would require that they police against the most common evasive forms.”
Binance told CNBC it had implemented “advanced detection tools” to root out users in “restricted and sanctioned regions that had access to sophisticated masking tools including VPNs.”
In other cases, the advice does not rely on a VPN.
In Dec. 2022, a person with the handle Stella, who was identified as a Binance community manager in the company’s online marketing materials, posted messages in a server-wide announcement channel, explaining how people could use a specialized “VPN-free” domain name and download an app which appears to be specifically tailored for customers in mainland China to use Binance services.
CNBC was provided the link to this app from an email address with a binance.com domain. A reporter was able to download the app from a location within China without a VPN, and register using a Chinese phone number. The app is hosted on Tencent, which offers a cloud computing service popular within China, and offers the ability to purchase crypto from other Binance customers in prices denominated in Chinese yuan, using the popular Chinese apps WeChat or Alipay. It also has options to submit Chinese identity documents for KYC verification.
Binance told CNBC it does not offer a specialized version of its app for Chinese customers. “‘Binance does not offer a ‘Binance Chinese Android app,” a spokesperson said. “There is only one official Binance app.”
More often, employees appear to refer questions about KYC to Binance Angels, creating a gap between the company and potential regulatory violations, messages reviewed by CNBC show. Binance has emphasized that Angels “are not representatives of Binance.”
“Our role is limited, and we do not speak on Binance’s behalf,” an Angel said in a Binance blog post.
But Binance’s Chinese-language Angels go through a separate training process that takes up to a year, according to a Binance hiring page. They’re vetted, trained, and deployed across Binance’s Telegram and Discord groups, operating under the supervision of Binance employees.
In one Oct. 2022 exchange reviewed by CNBC, an Angel advised a user who was having trouble accessing the specialized Binance websites that were supposed to work within mainland China.
That Angel told the user to switch their VPN to a different region and try again.
“How do users in mainland China register their accounts?” another user asked in a Mar. 2022 message.
“Register with an overseas email address,” the same Angel responded, before telling the user to pick Taiwan as their residence.
That volunteer offered similar guidance to other customers. In Apr. 2022, another purported mainland China resident asked “What could I do if proof of residence is required? Can I change my place of residence?”
“Proof of registered residence is not required,” this Angel responded.
In another case, a purported mainland resident worried about uploading their Chinese identity documents, messages from March 2022 show. The same Angel reassured the user they could claim to be in Taiwan but still submit a Chinese identity card, and Binance wouldn’t stop them.
“[Binance] doesn’t do business on the mainland, but it can’t stop mainland users from bypassing the great firewall to play,” the Angel assured the user.
Angels also teach users about the exchange’s offerings, best practices, and the blockchain.
In one question-and-answer lesson from Apr. 2022, two Binance Angels showed Chinese users how they could participate in Launchpad, Binance’s IPO-like product for new crypto tokens.
Chinese residents are prohibited from participating in initial exchange offerings under Chinese laws, including a specific ban on initial coin offerings.
“How do mainland users participate in Launchpad?” the Angel leading the session asked, rhetorically.
Several users said it was impossible.
But other participants in the Q&A, including a different Angel, said registering a foreign company or with foreign KYC would let mainland users sidestep Binance’s controls.
“Congratulations to this top student,” the session-leading Angel responded to the user who answered “overseas company” the fastest.
In comment to CNBC about the findings in this article, Binance reiterated that the Angels are not employees.
“Binance Angel Program is a community ambassador program, no different than the community ambassadors that operate on other platforms like Wikipedia and Reddit. Binance Angels are not given access to Binance equipment or Binance internal systems, nor do they have the authority to speak for Binance. Binance Angels are forbidden from sharing recommendations that are against our company policies or the law and would be immediately removed from the Binance Angel Program if they were found doing so.”
The Palau dodge
Palau launched its digital residency program in 2022 in an effort to modernize physical identity cards, rolling out an NFT-linked identity card that’s available for a few hundred U.S. dollars annually.
In a 2022 visit to the archipelago, Zhao called it a “very innovative” effort.
But Palau’s program also lets users around the world access Binance using their Palau “residency” to hide their country of citizenship and residency.
Customers openly referred to Palau’s program as a way to sidestep Binance’s country-specific controls, according to Telegram and Discord messages CNBC reviewed.
When users asked how to access products and currencies otherwise unavailable to Chinese residents, Angels guided them to an Oct. 2022 tweet from a handle that belongs to a Binance client relationship manager, according to a Binance customer who worked with them. That tweet, which has since been deleted, linked to a third-party Mandarin YouTube guide on using the Palau residency to pass Binance’s European Union KYC controls, even if the user lived outside the EU.
“Passing” allowed users to apply for Binance’s restricted Visa debit card, which lets them turn their crypto into fiat currency for use anywhere. (Visa declined to provide comment for this story.)
Specifically, the third-party video walks users through how to register with Palau, purchase the Palau ID, and upload the ID to Binance’s exchange. It then shows a user how to create a placeholder mail-forwarding Austrian address. Then, it offers an apparently genuine bank statement from the video creator’s German bank account, and explains how to modify the bank statement to include the Austrian address. Forging the bank statement takes nothing more than a PDF editor, according to the video’s creator.
In Nov. 2022, one user who said they were in mainland China inquired about the Binance Card, messages from the Discord server show. An Angel directed them to the video, and suggested it would help them get it.
In comment to CNBC, Binance says it did not have any part in creating the video guide. “That video is not a Binance-owned piece of content, nor is the content creator a Binance employee or even a Binance Angel.”
The technique of using fake Austrian credentials was well-known enough to be discussed in other chats in Nov. and Dec. 2022, although some of these chats did not make specific reference to this video.
One Binance employee warned an applicant not to apply for the Binance debit card “casually,” noting, “Some users said their accounts were banned after attempts to change their addresses to unauthorized countries.”
The customer reassured the Binance employee that they had used Austrian bank statements.
Similarly, in Dec. 2022 messages on Binance’s Chinese-language Telegram group, users complained that they couldn’t get a Binance debit card.
“If you are Chinese, you can’t,” one user said.
Another user guided them to a different video that used the same false proof-of-address and took advantage of an account from the same German bank.
“What if you can’t produce the relevant documents?” the creator of this second video asked rhetorically. “You can join my Telegram group. Someone in my group provides this service which can help you customize this address certificate.”
Or, the creator continued, mainland users could obtain “proof of address” or “overseas professional customization” on Taobao, a Chinese marketplace.
Regulatory and compliance experts told CNBC they were alarmed by how easily Binance users were able to fake KYC credentials.
“I’m sitting at main Justice, or the National Security Council, I get very concerned hearing this. If I’m sitting at the IRS, I get very concerned about this,” Meghji told CNBC.
Richards told CNBC that any unauthorized access to Binance would concern the exchange’s traditional financial partners, from Visa to a customer’s bank. If a user tried to withdraw funds from Binance into a JP Morgan Chase checking account, for example, it might cause some concern.
“Chase would look at the source of funds and see that they’re coming from Binance,” Richards said. “And if they know that Binance is suspect, then the source of funds could be seen as suspect.”
CNBC asked Binance for comment on the substance of all the reporting in this article, and shared several specific posts and messages in the process. All of those messages and posts, including the Binance employee’s Tweet sharing the how-to video, were deleted after CNBC provided them to Binance.
In addition, hours after Binance responded to CNBC, messages apeared on Twitter suggesting that some customers’ Binance debit cards had been frozen.
“Why is my Binance card frozen?” the customer asked in Chinese.
The employee told the customer to take their concerns to Binance’s banking partner.
“How do Binance applicants know which bank is issuing the card?” the user retorted.
President Trump’s new tariffs on goods that the U.S. imports from over 100 countries will have an effect on consumers, former Microsoft CEO Steve Ballmer told CNBC on Friday. Investors will feel the pain, too.
Microsoft’s stock dropped almost 6% in the past two days, as the Nasdaq wrapped up its worst week in five years.
“As a Microsoft shareholder, this kind of thing is not good,” Ballmer said, in an interview with Andrew Ross Sorkin that was tied to Microsoft’s 50th anniversary celebration. “It creates opportunity to be a serious, long-term player.”
Ballmer was sandwiched in between Microsoft co-founder Bill Gates and current CEO Satya Nadella for the interview.
“I took just enough economics in college — that tariffs are actually going to bring some turmoil,” said Ballmer, who was succeeded by Nadella in 2014. Gates, Microsoft’s first CEO, convinced Ballmer to join the company in 1980.
Gates, Ballmer and Nadella attended proceedings at Microsoft’s Redmond, Washington, campus on Friday to celebrate its first half-century.
Between the tariffs and weak quarterly revenue guidance announced in January, Microsoft’s stock is on track for its fifth straight month of declines, which would be the worst stretch since 2009. But the company remains a leader in the PC operating system and productivity software markets, and its partnership with startup OpenAI has led to gains in cloud computing.
“I think that disruption is very hard on people, and so the decision to do something for which disruption was inevitable, that needs a lot of popular support, and nobody could game theorize exactly who is going to do what in response,” Ballmer said, regarding the tariffs. “So, I think citizens really like stability a lot. And I hope people — individuals who will feel this, because people are feeling it, not just the stock market, people are going to feel it.”
Ballmer, who owns the Los Angeles Clippers, is among Microsoft’s biggest fans. He said he’s the company’s largest investor. In 2014, shortly after he bought the basketball team for $2 billion, he held over 333 million shares of the stock, according to a regulatory filing.
“I’m not going to probably have 50 more years on the planet,” he said. “But whatever minutes I have, I’m gonna be a large Microsoft shareholder.” He said there’s a bright future for computing, storage and intelligence. Microsoft launched the first Azure services while Ballmer was CEO.
Earlier this week Bloomberg reported that Microsoft, which pledged to spend $80 billion on AI-enabled data center infrastructure in the current fiscal year, has stopped discussions or pushed back the opening of facilities in the U.S. and abroad.
JPMorgan Chase’s chief economist, Bruce Kasman, said in a Thursday note that the chance of a global recession will be 60% if Trump’s tariffs kick in as described. His previous estimate was 40%.
“Fifty years from now, or 25 years from now, what is the one thing you can be guaranteed of, is the world needs more compute,” Nadella said. “So I want to keep those two thoughts and then take one step at a time, and then whatever are the geopolitical or economic shifts, we’ll adjust to it.”
Gates, who along with co-founder Paul Allen, sought to build a software company rather than sell both software and hardware, said he wasn’t sure what the economic effects of the tariffs will be. Today, most of Microsoft’s revenue comes from software. It also sells Surface PCs and Xbox consoles.
“So far, it’s just on goods, but you know, will it eventually be on services? Who knows?” said Gates, who reportedly donated around $50 million to a nonprofit that supported Democratic nominee Kamala Harris’ losing campaign.
AppLovin CEO Adam Foroughi provided more clarity on the ad-tech company’s late-stage effort to acquire TikTok, calling his offer a “much stronger bid than others” on CNBC’s The Exchange Friday afternoon.
Foroughi said the company is proposing a merger between AppLovin and the entire global business of TikTok, characterizing the deal as a “partnership” where the Chinese could participate in the upside while AppLovin would run the app.
“If you pair our algorithm with the TikTok audience, the expansion on that platform for dollars spent will be through the roof,” Foroughi said.
The news comes as President Trump announced he would extend the deadline a second time for TikTok’s Chinese-owned parent company ByteDance to sell the U.S. subsidiary of TikTok to an American buyer or face an effective ban on U.S. app stores. The new deadline is now in June, which, as Foroughi described, “buys more time to put the pieces together” on AppLovin’s bid.
“The president’s a great dealmaker — we’re proposing, essentially an enhancement to the deal that they’ve been working on, but a bigger version of all the deals contemplated,” he added.
AppLovin faces a crowded field of other interested U.S. backers, including Amazon, Oracle, billionaire Frank McCourt and his Project Liberty consortium, and numerous private equity firms. Some proposals reportedly structure the deal to give a U.S. buyer 50% ownership of the company, rather than a complete acquisition. The Chinese government will still need to approve the deal, and AppLovin’s interest in purchasing TikTok in “all markets outside of China” is “preliminary,” according to an April 3 SEC filing.
Correction: A prior version of this story incorrectly characterized China’s ongoing role in TikTok should AppLovin acquire the app.
U.S. President Donald Trump speaks during an event announcing new tariffs in the Rose Garden at the White House in Washington, April 2, 2025.
Chip Somodevilla | Getty Images
President Donald Trump announced an aggressive, far-reaching “reciprocal tariff” policy this week, leaving many economists and U.S. trade partners to question how the White House calculated its rates.
Trump’s plan established a 10% baseline tariff on almost every country, though many nations such as China, Vietnam and Taiwan are subject to much steeper rates. At a ceremony inthe Rose Garden on Wednesday, Trump held up a poster board that outlined the tariffs that it claims are “charged” to the U.S., as well as the “discounted” reciprocal tariffs that America would implement in response.
Those reciprocal tariffs are mostly about half of what the Trump administration said each country has charged the U.S. The poster suggests China charges a tariff of 67%, for instance, and that the U.S. will implement a 34% reciprocal tariff in response.
However, a report from the Cato Institute suggests the trade-weighted average tariff rates in most countries are much different than the figures touted by the Trump administration. The report is based on trade-weighted average duty rates from the World Trade Organization in 2023, the most recent year available.
The Cato Institute says the 2023 trade-weighted average tariff rate from China was 3%. Similarly, the administration says the EU charges the U.S. a tariff of 39%, while the 2023 trade-weighted average tariff rate was 2.7%, according to the report.
In India, the Trump administration claims that a 52% tariff is charged against the U.S., but Cato found that the 2023 trade-weighted average tariff rate was 12%.
Many users on social media this week were quick to notice that the U.S. appeared to have divided the trade deficit by imports from a given country to arrive at tariff rates for individual countries. It’s an unusual approach, as it suggests that the U.S. factored in the trade deficit in goods but ignored trade in services.
The Office of the U.S. Trade Representative briefly explained its approach in a release, and stated that computing the combined effects of tariff, regulatory, tax and other policies in various countries “can be proxied by computing the tariff level consistent with driving bilateral trade deficits to zero.”
“If trade deficits are persistent because of tariff and non-tariff policies and fundamentals, then the tariff rate consistent with offsetting these policies and fundamentals is reciprocal and fair,” the USTR said in the release.