Crypto Exchange Binance to Issue 'Soulbound' Tokens to Users Who Complete Know-Your-Customer Checks

Cryptocurrency exchange Binance plans to issue a "soulbound" token on the BNB blockchain to all users who complete know-your-customer (KYC) requirements, according to an official announcement.

Soulbound tokens, which in this case act as an identity passport across the BNB chain, are unique and non-transferrable. Users who would prefer their identity not be shared across the entire network can opt out of the token.

Binance's soulbound token – named binance account bound (BAB) – will allow users to participate in "building projects" while earning rewards, according to the release.

The concept of soulbound tokens was first discussed in a blog post by Vitalik Buterin, a co-founder of the Ethereum blockchain, in January. He described the new asset class as non-transferable digital tokens that represent social identity in a decentralized society.

The use of KYC in crypto came under intense scrutiny this week when decentralized exchange dYdX prompted its users to complete a "liveness check" using webcam technology, with several users commenting on the antithetical relationship between decentralization and KYC.

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Oliver Knight

Oliver Knight is a CoinDesk reporter based between London and Lisbon. He does not own any crypto.

Follow @OKnightCrypto on Twitter

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.