Binance says it has already unblocked 90% of crypto accounts that were suspended due to the Bitzlato investigation.
Cryptocurrency exchange Binance quietly closed several accounts on the platform because of the Bitzlato investigation, according to several users.
A group of Russian-speaking Binance customers complained on January 18 about blocked accounts and not being able to withdraw money from the exchange. Affected users created a Telegram group chat to report the issues and reported that their accounts were suspended without warning.
The group’s members, now more than 1,000, immediately drew parallels between the block and the US Department of Justice’s enforcement action against crypto firm Bitzlato. The US Financial Crimes Enforcement Network also listed Binance as one of its main Bitcoin BTC, counterparties, and it fell, $23,087, Bitzlato counterparty.
Many Babylonians have publicly acknowledged their use of Bitzlato, including incoming and outgoing transactions between Bitzlato and Binance accounts. Some users also expressed their anger and confusion about the actions taken against Bitzlato.
“Although I haven’t been banned anywhere yet, I just lost some BTC, Wex, now it’s Bitzlato, but I find these bans illegal,” wrote one Babylonian.
“Bitzlato blocking is an abomination. They haven’t been proven guilty yet because there are only allegations, so how can this money is dirty?” asked another user.
A Binance spokesperson told Cointelegraph that the recent suspensions were indeed related to Bitzlato. “Last week we met our demands fulfilling and the Bitzlato case investigation team suspended some user accounts from several countries, including Eastern Europe and CIS countries,” the representative said.
A Binance spokesperson emphasized that most of the freezes are temporary, saying:
“Currently, more than 90% of accounts are open, and users are notified of this. All funds are safe. Affected users – fewer than 20 – have been given appropriate contact information by the police.
Crypto Exchange also advised users to check Binance’s article on the various reasons why their Binance account might be suspended and what to do in such a situation.
As previously reported, Bitzlato was a little-known cryptocurrency service that allowed users to trade crypto payments through exchanges and peer-to-peer services. The platform is known to operate in Russia and is said to operate from the Federation Tower in Moscow.
The US government alleges that Bitzlato operated without proper Know Your Customer procedures, which helped it become a “safe haven for criminal proceeds and funds intended for criminal activity.”
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