Why Binance Opened 90% Of Accounts Closed For Investigation


Following the collapse of the crypto exchange FTX, most global regulators intensified their watch on crypto-related activities and platforms like Binance. As a result, some have opened investigations on most of the crypto industry’s prominent crypto exchanges and trading platforms. 

Crypto exchange Bitzlato has been under investigation by the United States Department of Justice (DoJ). The watchdog has unveiled some incriminating facts regarding money laundering activities on the platform. Subsequently, the US DoJ charged the crypto exchange’s founder and majority owner for unlicensed money transfers.

According to a recent report from FinCEN, the leading crypto exchange Binance is noted as the most significant Bitcoin counterparty for Bitzlato.

Some huge transactions from Bitzlato used Binance as their landing custody after trying to conceal the source of the illicit funds. Hence, Binance has been closing some accounts on its platform related to Bitzlato’s probe into money laundering, as noted by some users. 

Customers Lament About Their Blocked Accounts

Following the account blocks on Binance, some Russian-speaking customers complained on Telegram. The users created a Telegram group chat on January 18 to complain about their inability to withdraw funds from their accounts on the exchange platform. They noted that Binance implemented the measure without warning users.

Over 1,000 users are affected by the measure. The users believe their accounts were blocked due to the recent US Department of Justice enforcement action against Bitzlato. 

Some users have been expressing confusion and outrage regarding the action against this crypto exchange. However, most members have confirmed using Bitzlato and Binance accounts to complete some transactions. 

One of the chat users stated that it makes no sense to close accounts related to Bitzlato. He noted that “unless proven guilty, actions should not be taken based on mere accusations,” as in the case of Bitzlato. Other members of the group chat classified the measure as “unlawful.”

Binance Unlocks 90% Of Previously Blocked Crypto Accounts

A spokesperson for Binance confirmed that the exchange’s measure to close accounts was related to the Bitzlato investigatory case. In addition, the representative noted that Binance’s compliance and investigation team suspended several accounts of customers from many countries with the CIS and Eastern Europe. 

Further, the spokesperson noted that the measure was temporary as the exchange unlocked 90% of the blocked accounts. Binance has notified the users about the decision to re-open their accounts with all funds intact.

However, the representative stated that less than 20 accounts are still blocked. The exchange has released all the necessary law enforcement documentation for affected users.

Additionally, Binnace directed its users to the exchange’s policies to understand some reasons that could lead to an account being blocked by the platform. Such knowledge will help users avoid illegal transactions on the trading venue. 

90% Of Blocked Crypto Accounts On Binance Amid Bitzlato Investigation Now Open
Bitcoin price falls by 4.41% on the daily candle l BTCUSDT on Tradingview.com

Binance’s CEO Changpeng Zhao (CZ) has indicated the vigorous efforts of the exchange to block illicit fund transfers on the platform. For example, on January 16, CZ reported how Binance was instrumental in freezing the accounts of a group of hackers and helping the Huobi crypto exchange to recover 124 BTC.

Featured Image from Pixabay, tookapic | Charts by TradingView.

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