After the collapse of the FTX crypto exchange, most global regulators have stepped up their watch on crypto-related activities and platforms like Binance. As a result, some have opened investigations on most of the crypto exchanges and trading platforms that are prominent in the crypto industry.
Exchange Crypto Bitzlato has investigated by the United States Department of Justice (DoJ). The watchdog has revealed some disturbing facts about money laundering activities on the platform. Subsequently, the US DoJ charged the crypto exchange’s founder and majority owner with unlicensed money transfers.
According to a final report from FinCEN, major crypto exchange Binance is listed as the most important Bitcoin partner for Bitzlato.
Some of the big transactions from Bitzlato use Binance as landing custody after trying to hide the source of their illegal funds. Therefore, Binance has closed several accounts on the platform related to Bitzlato’s money laundering investigation, as noted by several users.
Customers Complain About Blocked Accounts
After the account ban on Binance, some Russian-speaking customers complained on Telegram. The users made Telegram group chat on January 18 to complain about not being able to withdraw funds from the account on the exchange platform. He noted that Binance implemented the measure without warning users.
More than 1,000 users were affected by the measure. The user believes his account was blocked due to a recent US Department of Justice enforcement action against Bitzlato.
Some users have expressed their confusion and anger about the actions taken against this crypto exchange. However, most members have been confirmed to use their Bitzlato and Binance accounts to complete some transactions.
One of the chat users stated there is no point in closing the account associated with Bitzlato. He noted that “unless proven guilty, action should not be taken based on allegations,” as in the case of Bitzlato. Another member from the group chat classified the move as “illegal.”
Binance Unlocks 90% of Previously Blocked Crypto Accounts
A Binance spokesperson confirmed that the exchange’s move to close the account is related to the Bitzlato investigation case. In addition, the representative noted that Binance’s compliance and investigation team suspended several customer accounts from many countries with the CIS and Eastern Europe.
Furthermore, the spokesperson noted that the measure is temporary as the exchange unlocks 90% of blocked accounts. Binance has notified users of the decision to reopen their accounts with all funds intact.
However, the representative stated that less than 20 accounts are still blocked. The exchange has released all required law enforcement documentation to affected users.
Additionally, Binnace directs users to exchange wisdom to understand some of the reasons that can cause your account to be blocked by the platform. This knowledge will help users to avoid illegal transactions on the trading floor.
Binance CEO Changpeng Zhao (CZ) has indicated the exchange’s strong efforts to block illegal fund transfers on the platform. For example, on January 16, CZ reported how Binance was instrumental in freezing the account of a group of hackers and helped crypto exchange Huobi to recover 124 BTC.
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