Binance has started issuing KYC tokens "soul bound" to each user's onchain wallet address. Needless to say, this is a huge privacy invasion open to all kinds of misuse

Binance has started issuing KYC tokens that will be "soul bound" to a user's wallet address. Which means, the KYC tokens cannot be moved to another wallet. Binance calls it Binance Account Bound (BAB) token. Binance claims this will be the proof of identification for a user's wallet, will help in preventing bots, verifying users for governance voting etc.

Introducing the Binance Account Bound BAB Token

This serves no real purpose other than an attempt to comply with government over reach. Governments want every crypto transaction to be tracked to user's real world identity. The whole concept is antithetical to crypto's principles of pseudo-anonymity.

Such schemes are open to all kinds of misuse. Binance itself had a KYC breach few years ago, which they then denied and claimed was not true.

https://www.theblock.co/post/8040/a-darknet-vendor-is-allegedly-selling-images-and-data-associated-with-crypto-exchange-identity-verification-processes

Binance KYC breach from 2019

Now Binance claims independent DeFi projects can verify users KYC by using the BAB token. There is no need for any DeFi project to verify user's onchain KYC. If there is, whats the difference between defi vs regular banking? None of the top Defi dapps even require any kind of KYC verification. Many top DAOs including Maker, Compound, Aave have pseudonymous DAO members in governance too.

Such moves coming from the largest exchanges are pretty sad. They are just submitting to the whims of government. Looking at this, now every other government will also impose such requirements. As of now, Binance claims BAB token are just optional, but its not far fetched to think they will be made mandatory.

Binance is just giving governments another tool to mount a new surveillance state against crypto users. Pretty pathetic from Binance.

When governments start demanding other exchanges also do this, remember this nonsense was kick started by Binance.

Edit: Reply guy calling this "Smart Move" is beyond dumb. By what logic is this a "smart move"? Thanks to this precedent by Binance, soon government will mandate DEX to allow only addresses that have a soulbound NFT, so that they can track your every move. At that point, using cash would be better than using any form of defi or crypto lol