DeFi
Binance Launches Proof-of-Know-Your-Customer (POC) Token That Can Be Used Across Multiple Platforms
Binance Account Token (BABT) is non-transferable and may be revoked by Binance.
Binancethe world’s largest cryptocurrency exchange, has tackled one of the industry’s most challenging problems: on-chain identity.
Binance Account Linked Token (BABT) offers Users who successfully complete Binance’s Know-Your-Customer (KYC) process receive a token that proves the process has been successfully completed. Users can then export the token to crypto and decentralized finance (DeFi) tools and protocols, including mixers.
BABTs are a type of Soulbound Token (SBT), which was a idea proposed first by Ethereum creator Vitalik Buterin. As Buterin introduced, SBTs are non-transferable tokens that represent users’ identities and achievements in the Web3 ecosystem.
BABTs have three key properties: they are not transferable between individuals, they cannot be transferred between addresses of the same person, and they can be revoked by the issuer but minted again within 72 hours.
Binance in November had to pay The U.S. government has been fined $4.3 billion for violating the country’s anti-money laundering laws.
The BABTs show that the company is committed to working with regulators to enforce KYC/AML rules, but is doing so in a way that incorporates blockchain technology.
Not everyone is convinced
Some users are suspicious about the feasibility of BABTs.
“This assumes that the addresses are 1-to-1 with the KYC person and are not shared or compromised,” wrote James McCall on X, who predicts that “this will just create a market for these accounts.”
Zack Burks, founder of Mintable, believes the idea won’t work for several reasons. He cited the Financial Action Task Force (FATF), AML requirements, jurisdictional differences, and the possibility of selling private keys or wallets with a BABT.
“While this is cool and it’s good marketing, unfortunately only Binance partners will be participating in this, and ultimately if regulators come knocking, those partners will be responsible for how this is used,” he said. wrote.
Other companies may look to see how Binance’s innovation works for them, and whether it can provide a more crypto-native way to begin bridging DeFi protocols and centralized platforms.