Binance customers report account blocks

Since late 2022, Russian users of the cryptocurrency exchange Binance have faced account blocks without explanation. For many, the problems have persisted for several weeks, as told to ForkLog by those affected.

The situation was also noted by the Twitter account Bull.BnB.

Dear Binance alot of people are sending me complaints like this what’s going on? Any new countries in restriction zone? pic.twitter.com/J550L2iYXS

— Bull.BnB (@bull_bnb) January 8, 2023

Similar threads appeared on Binance’s official channels on Twitter and on Reddit.

Cases

One of the affected, Alex, told ForkLog that on the morning of January 9 he encountered a block of an account registered more than five years ago. At the time of the incident his account held about 40,000 USDT.

“They declined withdrawing USDT to a personal Trust Wallet. A message appeared saying withdrawals are temporarily blocked for 24 hours.”

A day later the message changed to the following:

“Support in the chat said that within 30 business days my case would be reviewed by a specialised department, after which I would receive a letter from them. The reasons for the block were not given, citing the Terms of Use,” — added Alex.

The user says he used the account solely for trading and transferred funds from Russia to Thailand, using the exchange aggregator BestChange, the exchange Garantex and the Trust Wallet. Transactions were mainly conducted via Binance’s P2P service.

“I did not organise any scams or the like. I did not receive funds from unknown senders. Hydra and other [illicit] services were definitely not used,” he clarified in a ForkLog comment.

On January 26, Alex told our editors that his problem was resolved and that he expected withdrawals to open within the next two to three days.

“Binance said they were closing the account and enabling withdrawals,” he added.

Another affected person, who asked for anonymity, told ForkLog that he encountered a withdrawal ban on January 22 during a transfer of USDT to his wallet. Support also redirected him to a “specialised team,” warning of a long wait due to “heavy traffic and a complex case.”

The client denies any involvement in suspicious transactions, noting that he uses only Binance’s internal P2P service and buys cryptos only from verified sellers.

The amount of blocked funds on his wallet is about 2,000 USDT. At the time of writing, the account remains blocked. In the latest message, support offered him to wait 30 business days for a resolution.

Mikhail — the third affected person ForkLog spoke with — encountered two account blocks: January 4 and January 11.

According to him, the first one lasted a week due to a “transfer on P2P from a third-party card” following a complaint by the second party to the deal. The second one was for 30 business days. He asserts that he did not conduct any suspicious transactions.

The amount blocked on Mikhail’s account is around $38,000. As of writing, his problem remains unresolved.

Victims’ chat

On January 18, affected users who faced blocks created a Telegram chat to discuss ways to resolve the problems. Initially it comprised roughly 300 people. According to participants, most are Russian citizens with foreign residence.

From posts in the chat, Binance restricted their access to the exchange for 30 business days without explanation. Some lost access to login, while others were forbidden from withdrawing funds.

A January 20 poll in the chat showed that among 119 respondents, 38% had less than $10,000 USD blocked, 20% had between $10,000 and $100,000, and 44% had more than $100,000.

The main wave of blocks coincided with the shutdown of the Bitzlato crypto-exchange, which US authorities charged in laundering $700 million, linked to the Hydra darknet marketplace.

On January 20 regional Binance director Vladimir Smerkis joined the chat and invited affected users to fill out a Google form for a “prompt” resolution of the issues.

Two days later Smerkis said that “the main part of the accounts has been successfully unblocked.” Subsequently in the chat it was clarified that the blocks referred to dates of January 17–18. The remaining users were moved to customer support.

As of writing, the form is unavailable; it is not possible to know how many filled it or how many received help. Binance representatives declined to provide specific figures.

Smerkis emphasised that the reasons for blocking accounts on Binance can be “absolutely varied,” and the exchange team cannot always provide concrete timelines for case reviews. He also denies that the problem was nationwide.

“There was no mass ban, and there isn’t one. A number of users faced blocks, the majority have already been unblocked. Others received letters with instructions,” he wrote in the chat.

Binance comments

In ForkLog’s comment, Binance representatives confirmed the blocking of a number of users from several countries, including Eastern Europe and the CIS. They clarified that the case dated last week was initiated by the compliance and investigations team in connection with the Bitzlato case.

“All users whose accounts were blocked were notified and asked to wait for a separate notification on further actions. To date, more than 90% of accounts have been unblocked. All funds are safe. Affected users (fewer than 20) were provided with the relevant contact information for law enforcement,” Binance said.

The exchange team noted that law enforcement often restricts what information companies can share with users. Still, they said Binance has aimed to “share as much data as possible within these constraints” and lifted the latest restrictions when authorities allowed them to do so.

“Binance adheres to a policy of cooperation and compliance with all legal information requests and legal requests from government, local regulators and law enforcement. Protecting our users has always been Binance’s top priority,” the company’s representatives said.

Separately, the exchange team shared a list of the most common reasons for account blocks:

• communicating with a scammer;
• potential ties to sanctioned individuals or entities, residence or travel to a sanctioned jurisdiction;
• violation of the platform’s Terms of Use;
• incomplete submission of documents for KYC or AML purposes;
• an established link of assets to hacking or fraud;
• suspicion that you are a hacker or other malicious user;
• block by law enforcement.

In September 2021, Binance blocked assets of some users due to potential ties to sanctioned exchange Suex. A notice of the reasons for the account suspension reached the affected users only the day after problems arose.

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