According to several users, the Binance crypto exchange has tacitly closed several accounts connected to the Bitzlato investigation.
On Jan. 18, a group of Binance’s Russian customers allegedly complained that their accounts were blocked and unable to withdraw their funds from the exchange. Affected users created a group chat on Telegram in order to report the problem, stating that the accounts had been blocked without any warning.
Members of the group – which now has more than 1,000 members – were quick to draw parallels between the blockades and the US Department of Justice’s enforcement action against cryptocurrency firm Bitzlato. The US Financial Crimes Enforcement Network has also listed Binance as one of Bitzlato’s top Bitcoin (BTC) counterparties.
Many chat members have openly admitted to using Bitzlato, including incoming and outgoing transactions between Bitzlato and Binance accounts. Some affected users also have expressed outrage and confusion for action against Bitzlato.
“Although I haven’t been banned anywhere yet, I just lost something on BTC-e, Wex, now it’s Bitzlato, but I consider these bans illegitimate”reports a chat member.
“The blockades related to Bitzlato are nonsense. So far their guilt has not been proven, there are only allegations, so how can this money be dirty?”another user asks.
A Binance spokesperson told Cointelegraph that the recent suspensions would actually be linked to Bitzlato. “Last week, our Compliance and Investigations team, in connection with the Bitzlato case, suspended the accounts of some users from several countries, including Eastern Europe and the CIS”declares the representative.
The Binance spokesperson pointed out that most of the suspensions were temporary, reporting that:
“At present, over 90% of accounts have been unlocked and users have been notified. All funds are secure. Fewer than 20 affected users – contact information with law enforcement provided.”
The crypto exchange also advised users to check out Binance’s article on the multiple reasons why their account might be blocked and what to do in such a situation.
As previously reported, Bitzlato was a little-known cryptocurrency service that allowed users to trade crypto assets through an exchange and peer-to-peer services. The platform is known for its significant activities in Russia, operating from the Federation Tower skyscraper in Moscow.
According to US government allegations, Bitzlato ran its operations without the correct Know Your Customer procedureswhich would help her become a “haven for the proceeds of criminal activity and for funds intended for use in criminal activity”.
