Binance Disables Several Accounts Due To The Bitzlato Case: ‘Funds are safe’

Key Points:

• Binance has been covertly closing down a number of accounts on the platform in connection with the Bitzlato probe.
• Binance is one among the counterparties of Bitzlato that the US Financial Crimes Enforcement Network has listed.
• Bitzlato was a little-known cryptocurrency trading platform that let users trade digital currency through an exchange and peer-to-peer platforms.

According to many users, cryptocurrency exchange Binance has been covertly closing down a number of accounts on the platform in connection with the Bitzlato probe.

Several Russian-speaking Binance customers complained about restricted accounts and being unable to withdraw money from the exchange on January 18. The affected individuals complained about the problems in a Telegram group conversation, claiming that the accounts had been shut off abruptly.

The group’s members, who number more than 1,000, immediately compared the restrictions to the US Department of Justice’s enforcement action against the crypto company Bitzlato. Binance is one among the counterparties of Bitzlato that the US Financial Crimes Enforcement Network has listed.

Many chat members have openly admitted that they used Bitzlato, including incoming and outgoing transactions between Bitzlato and Binance accounts.

Some affected users also expressed outrage and confusion about the action against 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.

Binance’s spokesperson emphasized that the majority of the suspensions were temporary, stating:

“At the moment, more than 90% of the accounts have been unlocked, users have been notified about this. All funds are safe. Affected users — less than 20 — have been provided with relevant law enforcement contact information.”

Additionally, the cryptocurrency exchange recommended that users read Binance’s blog on the various reasons why their Binance account can be disabled and what to do in such a circumstance.

As was previously mentioned, Bitzlato was a little-known cryptocurrency trading platform that let users trade digital currency through an exchange and peer-to-peer platforms. The platform is believed to retain considerable activities in Russia and is said to do so from the Moscow skyscraper known as the Federation Tower.

The U.S. authorities claims that Bitzlato conducted business without following proper Know Your Customer standards, which allowed it to develop into “a sanctuary for criminal proceeds and funds intended for use in criminal activities.”

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