Binance disabled a user’s wallet in response to a request from law enforcement. The locked wallet contains $1 million worth of coins…
Binance freezes $1 million account
The world’s largest cryptocurrency exchange froze the hot wallet of a user named “TezosBakingBad” on Twitter at the request of law enforcement. The user later claimed on Twitter that the exchange had frozen his account “for no reason whatsoever”. Binance soon stated that Baking Bad’s corporate account was frozen as a result of a law enforcement request. However, the user accuses Binance of blocking his corporate account and deleting $1 million for no reason.
Our corporate @binance account is blocked since July 1 without any explanations. Today all our balances were set to zero (more than $1M). We have all the materials to begin the investigation and inform the community, but for now just stay away from Binance and @cz_binance #SAFU pic.twitter.com/PpZSBhYpZS
— Baking Bad (@TezosBakingBad) August 25, 2022
Wallet full of these coins
According to the exchange, Baking Bad’s corporate account was frozen as a result of a law enforcement request. Baking Bad said that he was unaware of the incident and became aware of the situation after a few notifications. The user announced that his corporate account of 1 million dollars was emptied in his shares on Twitter. The wallet contains the following cryptocurrencies in large quantities.
- Polygon (MATIC)
- Chainlink (LINK)
- Tether (USDT)
- Ethereum (ETH)
Our corporate @binance account is blocked since July 1 without any explanations. Today all our balances were set to zero (more than $1M). We have all the materials to begin the investigation and inform the community, but for now just stay away from Binance and @cz_binance #SAFU pic.twitter.com/PpZSBhYpZS
— Baking Bad (@TezosBakingBad) August 25, 2022
Behind the scenes of the Binance decision
Baking Bad reported that on July 4, Binance support informed them of a law enforcement investigation into the aforementioned account. However, attempts to resolve these issues proved futile as the Department of Justice (DoJ) did not respond. “Binance traded the account without any notice,” continues Baking Bad. Additionally, he stated that they “have little confidence that there is actually any investigation.”
They claim that responses to questions submitted via the DoJ fact sheet should be received within 20 days. However, despite many inquiries over a two-month period, the business did not receive a response. On April 25, Tezos Baking Bad claimed that Binance had passed its institutional know-your-customer policy. However, before suspending and deleting the account’s funds, the exchange did not send any correspondence to its corporate address, either physically or electronically.
We haven't received any details about the LA request, even some reference number/letter date. We haven't received any response from the LA either thus we are making a conclusion that there's likely no such request.
— Baking Bad (@TezosBakingBad) August 25, 2022
Tezos Baking Bad claims that Binance canceling its account without a court order raises more questions about the whole thing. Also, Baking Bad warned the community to “stay away from Binance” and said the exchange is not safe.
Binance reaction
While a spokesperson for Binance recommended using the law enforcement contact form three times, Tezos Baking Bad confirmed that he was notified of the law enforcement request. The representative said:
As with any other exchange, “Binance has to cooperate with such requests.”
Yes, we sent about five requests from this form. And every time we wrote this in support. We haven't received any response, despite the fact that the deadline is 20 days. So it seems that they have nothing to do with it and it is @binance's decision.
— Baking Bad (@TezosBakingBad) August 25, 2022
Binance also said in a tweet that Tezos Baking Bad was deceiving the public, adding that the agency should be contacted directly to appeal the takeover, as it “has zero authority over this process.”
https://twitter.com/binance/status/156289055468511233
