Hello and Namaste Everyone,
A lot of people say that we should avoid using the centralised exchanges and now I realise that is why they are saying it. It is because you never know when these exchanges start doing something that we as users or not ok with. As the name itself says it is the centralised exchange which simply means that they have the power to do whatever they want. All the users have to abide by the rules set up by the exchange and there is no way to avoid it. It is because the system has been created in such a way that if you don't agree to the terms then you'll not be allowed to use it.
In India, there are two types of exchanges. One is local exchange and another is international exchange. This year in the beginning Indian government blocked nine exchanges and out of these nine two exchanges are now registered in India. They are FI U compliant in the country and FIU means finance and intelligence unit. It is a government body that ensures that all the companies dealing in finance or compliant with the guidelines. Any company that is registered in India with FIU compliant then the company has to follow the norms defined by them. Binance is the second exchange registered in India after Kucoin.
Binance has started asking for more details for crypto withdrawals. I want to mention here that Indian exchanges are not supporting crypto withdrawals and hardly any exchange is providing this functionality. This international exchange provides this service, but now they have started asking for more details. This week I tried to withdraw something from my exchange and I was asked for more details about this withdrawal. First of all, they are asking if this is the withdrawal that I am sending to myself. If I select that I'm sending the funds to myself then they ask whether it's a private wallet or another wallet service provider.
If I select that I am sending the fund to another beneficiary then I need to provide that details to the exchange. You can see in the below snapshot that what are the information they are asking for withdrawal and it is clear that they want to track each withdrawal. This is the problem with centralized trying to track something that should be decentralized.
I don't use Exchange much but I think after this change I will have to stop using it because there is no point tracking all my transactions even when I am not selling anything. It's like I have funds with the bank and before withdrawal, they are asking me to give them the reason why I'm doing this. Why should I give them a reason when it is my money and I can use it the way I want? Instead, I would prefer to keep my money in something where I do need not to answer these unnecessary questions.
Sadly authorities like FIU and other relevant authorities are not bothered about users' fund safety but they are more interested in knowing how these funds are used and where the users are sending those funds. It is not bad but at the same time, they also need to be more careful about users' funds they are not and the Wazir X hack is the latest example. Nothing has been done till now in this case and now when the court is involved with this hack event then looks like Fiu is also going to be involved in the investigation. It is still too early because the court ordered FIU and police to investigate last week only and not sure how much time it will take to get the investigation done.
snapshots from Binance website
Thank you so much
Stay Safe
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