Binance Disables Bitzlato-Related Accounts: ‘Funds are safe’
Binance says that 90% of the cryptocurrency accounts frozen because of the Bitzlato investigation have already been unblocked.
Several users say that the cryptocurrency exchange Binance has been shutting down accounts in the background because of the Bitzlato investigation.
On January 18, a group of Russian-speaking Binance customers said their accounts were locked, and they couldn’t get their money out of the exchange. The people who were having problems reported them in a Telegram group chat. They said that their accounts were blocked without any warning.
Members of the group, which now has more than 1,000 people, immediately saw similarities between the blockages and what the U.S. Department of Justice did to the crypto company Bitzlato. The U.S. Financial Crimes Enforcement Network also put Binance on its list of Bitzlato’s top Bitcoin BTC counterparties.
Many chat people have come out and said they used Bitzlato, including sending and receiving money between their Bitzlato and Binance accounts. Some affected users were also angry and confused by what was done to Bitzlato.
“Though I haven’t been banned anywhere yet, I just lost some on BTC-e, Wex, now it’s Bitzlato, but I consider these bans to be lawlessness,” one chat member wrote.
“Blockages in relation to Bitzlato are nonsense. They haven’t been proven guilty so far as there are only accusations, so how can this money be dirty?” another user asked.
A Binance representative told Cointelegraph that the recent suspensions were related to Bitzlato. Concerning the Bitzlato case, the representative said that our compliance and investigations team shut down the accounts of some users from Eastern Europe and the CIS last week.
Binance’s spokesperson said that most of the suspensions were only temporary:
“At the moment, more than 90% of the accounts have been unlocked, and users have been notified about this. All funds are safe. Affected users — less than 20 — have been provided with relevant law enforcement contact information.”
The cryptocurrency exchange also told users to read Binance’s article about why their Binance account could be blocked and what to do if this happens.
As has been said, Bitzlato was a cryptocurrency service few people knew about. It lets users trade cryptocurrency through an exchange and peer-to-peer services. The platform does a lot of business in Russia, supposedly from the Federation Tower skyscraper in Moscow.
The U.S. government says that Bitzlato didn’t have the right “Know Your Customer” procedures in place. Which made it “a haven for criminal proceeds and funds intended for use in criminal activity.”
