Crypto Entities That Neglect AI and Machine Learning Investment Will Lag Behind, Warns Binance CTO

Binance’s Robust AML and Compliance Standards

Such tools, the CTO argued, enable Binance to establish and uphold “robust anti-money laundering and compliance standards” He added that the regulatory approvals and licenses that the cryptocurrency exchange has secured in the past serve as proof of authorities’ confidence in Binance’s compliance mechanism.

In addition to complying with regulations, Wad also disclosed that the cryptocurrency exchange has been involved in raising awareness and training industry bodies, law enforcement (LE) officers, and prosecutors on detecting financial and cybercrime. Wad said this crucial step helps ensure the “safety of the blockchain ecosystem while allowing for innovative solutions to progress.”

Regarding his platform’s efforts to protect users from scams, the CTO disclosed that Binance is currently utilizing artificial intelligence (AI) to safeguard users from online criminals. He further contended that cryptocurrency exchanges failing to invest in AI and Anti-Money Laundering (AML) tools will be left behind.

In his written responses to Bitcoin.com News, delivered via Telegram, Wad underscored the role of education in helping improve user experience. He also elaborated on why Binance has initiated an inscriptions marketplace and the potential impact on the Bitcoin network ecosystem.

Bitcoin.com News (BCN): You’ve had a decades-long career at Web2 giants like Google, Microsoft and Facebook before joining Binance. What drove you to work and make an impact in Web3?

Rohit Wad (RW): Before I came to Binance, I worked on the likes of Excel and Sharepoint—this is before the days of social media and the technological world we know today—so really, you can say I’ve been around since Web1. Much of the technology I worked on was foundational for what came after it and paved the way for future technological innovations, inventions, and huge shifts in how we see and interact with the world.

I’ve always been fascinated by this – what do we need to build to create big shifts in thinking and in life? Pushing the boundaries of technological possibility excites me, and it is ultimately what has brought me to crypto, blockchain, and Web3.

When people ask me why I have come to this space – I say: could you imagine telling someone back then about this thing called Netflix, a service that would let you watch any movie or TV show on your TV, computer, or phone? Much like how Netflix brought movies and TV shows to people globally, my aim is to now bring the benefits of Web3, cryptocurrency, and blockchain to everyone.

BCN: As the CTO of Binance, you’ve been prioritizing accessibility, which entails making it easier for new users to get started. Most wallets out there are still complicated to set up, use, and secure, especially for newcomers. It could be overwhelming for new users to start using decentralized finance ( defi) products and services. How can we make it more noob-friendly without turning off the crypto pioneers or OGs?

RW: Being new to crypto can indeed be a complicated space, but we can make it simpler than it is today. Very few users come in saying “I want defi” or “I want an MPC wallet.” Most users (beginners and advanced) come with some thoughts such as “I want to buy and hold crypto securely and make some returns” or “I want to be an active trader of these commodities.”

Getting crypto set up and started can feel especially hard if you’re not used to defi products, or centralized finance (cefi) products, or cedefi products.

One area that we will focus on to help make our features more accessible is simplifying our UI. You make a great point about striking a balance between making it easier for users without oversimplifying for crypto OGs. That being said, in general, I think simplifying our UI is good for everyone as long as it doesn’t detract from usefulness and functionality.

We also have a huge wealth of educational material on Binance Academy to help people get started in crypto if it does feel overwhelming. All of the articles and courses are free to access globally. There are some great beginner materials on there like Crypto 101 and A Beginner’s Guide To Decentralized Finance for anyone looking to start finding out more.

BCN: Control over private keys is at the heart of self-custody, but in many cases users cannot securely manage their keys. Often they fall victim to social engineering, phishing, and other scams. What do you think is the right solution for them, especially if they frequently interact with decentralized apps ( dapps), non-fungible tokens ( NFT), and defi protocols?

RW: This is the main reason that we created the Binance Web 3.0 wallet – self-custody is one of the foundations of defi and people feeling that they have freedom over their funds, but as you point out – it’s a scary and daunting thought for people that they could fall victim to scams or lose their details. We wanted the Web 3 wallet to be a portal to the defi world but one that felt easier and more secure than some of the other options available to people out there before it was launched.

In terms of the “right” solution, it’s hard because everybody has different wants and needs. Our philosophy is that if we build great products that solve real problems, people will choose them if they are the right solution for them. The thought behind launching Web 3.0 Wallet was to provide another option for people who might want the security of cefi with the freedom and access of defi – you can trade tokens, explore dapps, buy NFTs, we wanted it to be a sort of portal between the cefi and defi worlds.

We have had a lot of feedback from people on the Web 3.0 Wallet, there are some areas where people have offered development ideas too and that’s something we are always open to hearing – it’s important to us that people tell us what they think and how we can improve and we always take this on board, and where we can we make changes based on that feedback.

BCN: Can you give us a glimpse of what Binance has in store, in terms of products and features, for the rest of 2024?

RW: This year is all about increasing accessibility to crypto, building more products that provide financial freedom and choice to people, and investing in AI and ML to continue improving things for our users.

This year, we want to make it as easy as possible for crypto newbies to do what they want.

Whether people are buying, selling, securely storing, or using their cryptocurrency, we need to build products and features that are easy to use, simple to understand, and help make crypto accessible and useful in the real world.

That starts with easy-to-use products, an easy-to-use interface and user-friendly features that you don’t need to spend hours getting to grips with before you know what to do. This is where you’ll see us doubling down on making everything more user-friendly – for those new to crypto and crypto OGs. So you’ll see us working on our overall UX and UI and improving our features to make them simpler, faster and easier to use.

Speaking of making things faster, we’re already the fastest in many areas, which we pride ourselves on, but we want to be faster – faster for order placements and faster to fix problems when they arise.

BCN: Better education and information sharing could be an effective tool to improve accessibility. In your opinion, how is crypto education evolving and what impact could socialfi have on educating the masses?

RW: We also know that improving accessibility means improving education and information sharing. At Binance, we invest heavily in free education and materials, as I mentioned before on Binance Academy, but one area I’m personally excited to see more of is the socialfi space. The crypto community is well-known for being a lively space for information sharing, so building features that tap into socialfi is something we will keep in mind as we evolve our social features like Binance Square.

The idea of socialfi and giving more control and freedom to content creators who share their knowledge, tips, tricks, and lessons from the world of crypto and Web3 is exciting, and I’m sure we will see a lot of developments in this area this year.

BCN: Based on recent reports, Binance has increased its compliance budget by 35% YoY from $158 million to $213 million. Can you talk about Binance’s compliance culture and the initiatives, if any, you’ve taken to address the new challenges?

RW: Over the last two years or so, we have made tremendous efforts and investments in external partners, including KYC vendors, transaction monitoring, market surveillance and investigative tools that support our compliance programs.

You’re right that in 2023 alone, we increased our investments in compliance to $213M. We hold the most licenses and regulatory approvals which is a testament to our robust AML and compliance standards.

In this nascent and fast-growing industry, we have had to evolve quickly to ensure the highest regulatory compliance standard as the space matures and as we learn/adapt alongside other players and regulators.

We are continuing to work with regulators, intergovernmental and industry bodies to make mutual advances towards identifying and mitigating financial crime risk by educating and furthering awareness about crypto compliance. This also includes training and support to LE and prosecutors on detecting financial and cybercrime. This is a critical step to ensuring the safety of the blockchain ecosystem while allowing for innovative solutions to progress.

BCN: With painfully high inflation in dozens of countries across the globe, what is the potential for crypto payments to go mainstream in the near term? How is Binance, if at all, helping take crypto payments to the masses in the real-world?

RW: I think we’re on the cusp of seeing huge developments in this space, but again it has to be easy and simple for users to be able to pay using crypto if we are to see it go mainstream.

Making a difference in the real-world is essential if we are to meet our ambitions to increase financial freedom. So whilst we’ve had huge success with Binance Pay, which is a great example of technology that bridges the gap between digital assets and the real world, we still need more vendors and more partners for it to take off and be genuinely useful. We do already have some great partners on board that mean crypto to be used in the mainstream world – like being able to pay for your Five Guys burger in Bahrain or even being able to use crypto to buy a house in Spain.

Over the last 12 months, Binance Pay has been focused on being more user-friendly and on seamlessly integrating crypto payments into daily transactions through initiatives such as defi wallet integrations and diverse industry partnerships. That has led to over $120bn in payment transactions so far and those integrations are also essential if we want to see the space grow.

BCN: Recently, Binance introduced the Inscriptions Marketplace right within the Binance Web3 wallet. What’s the reasoning behind launching an inscriptions marketplace and how do you see the real-world implications of these inscriptions?

RW: Inscriptions and BRC-20s have served as significant catalysts for activity in the Bitcoin ecosystem over the past year. They have invigorated developer communities by drawing in new talent, accelerating the pace of project updates, and generating innovations within the Bitcoin ecosystem.

New innovations like this bring novel use cases to the space, which is always good for our industry. The real-world implication of this is that I hope it will inspire more developers and fellow crypto enthusiasts to explore this exciting field and that means we’re likely to see new, exciting innovation in this space. New tokens, new NFTs and new projects.
This is one of many new features that we added to the Binance Web3 wallet. Binance introduced a number of new features to the Binance Web3 Wallet, including the introduction of new chains, enhanced swap options, and 19 more integrated dapps.

BCN: Web3 and artificial intelligence (AI) are two of the hottest buzzwords in the tech industry. Do you think that AI could be a good tool to make the crypto industry safer, probably by preventing scams and protecting users?

RW: Yes, we are definitely going to continue to explore how we can leverage AI and ML technology to enhance our features and to protect users.

We already have robust AI and ML technology that works 24/7 to protect our users from potential scams on Binance P2P, including LLM technology, (large language model). This AI technology has been “trained” from using text data across the internet, to help us identify scams. Over time, these models can be trained, or fine-tuned, to excel at specific tasks, like generating original pieces of text or recognizing messages that can signal senders’ malicious intentions.

I believe that this will be an important focus for us this year and it’s my firm belief that investment in this area is essential for user safety and for our growth. I also believe brands that fail to invest in AI and ML will fall behind.

You might have seen that as well as looking at AI and ML for safety, we are also trying out some cool new things too – like our recently launched Binance Crypto Analysis Bot, which leverages market data and AI to provide users with cryptocurrency analysis and insights on an adhoc basis.

There’s a lot to be excited for this year and we’re feeling optimistic about our plans to build for our users and our industry. Whether it’s making crypto more accessible for people, expanding our offerings to increase financial freedom or looking at what technology we can incorporate and build to keep our users feeling safe and secure on Binance, we’re getting ready for a busy year ahead.

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