Binance Charged With $860K Worth of Crypto Funds

Cryptocurrency exchange Binance was accused of freezing an account worth around $1 million crypto fund. The account holder accuses the embezzlement platform, but the Binance claims it simply followed the requirements of the South Korean police.

09 April, 2020 | AtoZ Markets – Binance has responded to the embezzlement claim of funds that were frozen on a user's account in November 2018. Binance blocked an account that contained more than $ 850,000 of crypto funds at that time. The owner claims that Binance stole the money, Russian crypto site Forkcast reports, citing HackControl.

The account holder claims that Binance froze crypto funds worth $ 858,999 at the time. More specifically, Binance blocked:

  • 4.5609 BTC
  • 1,600.215 ETH
  • 4,290.39 ETC
  • 726 LTC
  • 169,646 IOTA
  • 33,895.14 EOS
  • 810 807 TRON
  • 365 ZEC
  • 128 XMR
  • 6 DASH
  • 765 BCH
  • 1170 USDT.

Why Did Binance Freeze the Account?

Binance required KYC / AML verification procedures and an explanation regarding the origin of the funds. The exchange said the account had been blocked at the request of the South Korean police. But the user said he hadn’t received any complaints from the South Korean authorities.

It all started with an Ethereum transaction. In a long statement, the exchange said the account holder allegedly received 3,995 Ethereum (ETH) through a listing fee scam. Binance provided screenshots of correspondence with Korean authorities to support its claims. Forkcast also reported that $251,194 worth of the seized crypto had no connection to the funds linked to the alleged listing scam.

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Binance said that part of the ETH transferred by the user was stolen from a Korean project on 8 November. Binance said it eventually transferred the amount to the South Korean police.

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User Also Filed a Complaint With a Ukrainian Law Enforcement Agency

The exchange said, the user filed a complaint with a separate Ukrainian law enforcement agency, which contacted them in April 2019. Binance said it was able to convince the agency that it had acted appropriately. However, the user does not find any ruling from the South Korean police. The latter denies having made complaints about the owner of the account.

Besides, the police stressed that they had not asked to freeze or transfer crypto funds, said the user. He added that he sent correspondence with the South Korean police to Binance, but that the exchange is unresponsive.

"I believe that Binance embezzled my money for itself. Communication with them continues from 21 November, 2018. It has already been 18 months," said the user. The user claimed to be in contact with other Binance users who believe that the exchange wrongly froze their funds and that they are preparing a collective lawsuit.

It seems that this was not the first exchange-related incident. HackControl has discovered similar cases with damages totalling $ 3 million. The users will launch a class action against Binance.

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