Binance Crypto Exchange Faces Allegations of Withholding Funds

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Binance, the largest cryp­to exchange by vol­ume, has faced sev­er­al dif­fi­cul­ties this year. Now, issues have sur­faced regard­ing with­hold­ing funds from users of its P2P marketplace. 

Binance has faced a steady stream of crit­i­cism since the col­lapse of the FTX cryp­to exchange. Many affect­ed users and investors even blamed Binance for con­tribut­ing to the down­fall of FTX. 

Then, things took a turn for the worse when it announced that cus­tomers of the exchange would be unable to with­draw amounts under $100,000 via the SWIFT glob­al pay­ments network. 

Binance was also forced to shut down some accounts relat­ed to the Rus­sia-based Bit­zla­to exchange after it was found to have used Binance for ille­gal­ly fun­nel­ing funds. Most recent­ly, there was found to be an inter­min­gling of funds and cus­tomer wal­lets relat­ing to its B‑Tokens, which are wrapped assets that can be bridged across dif­fer­ent networks. 

P2P Users Demand Answers Over Lost Money

Now, users of its P2P (peer-to-peer) mar­ket­place have lashed out at the exchange for alleged­ly restrict­ing their accounts. Some of these affect­ed users reached out to BeIn­Cryp­to to share their expe­ri­ences and stories.

P2P traders are indi­vid­u­als who buy and sell cryp­tocur­ren­cies direct­ly with each oth­er with­out the involve­ment of a cen­tral author­i­ty. They use plat­forms such as Binance P2P to facil­i­tate trans­ac­tions. These traders typ­i­cal­ly want to buy or sell cryp­tocur­ren­cies quick­ly and eas­i­ly with­out going through a cen­tral­ized exchange or finan­cial insti­tu­tion. The ben­e­fits of P2P trad­ing include low­er fees, faster trans­ac­tions, and greater pri­va­cy and secu­ri­ty

A Red­dit user who goes by the han­dle u/minghuaa was one of the first to call out the exchange. In a Red­dit thread, the user wrote that Binance ruined their life after they were unable to with­draw their life sav­ings via Binance’s P2P mar­ket­place. Despite being ver­i­fied, the Binance cus­tomer sup­port team claimed the ‘buyer’s funds were stolen and can­celed the transaction.’

The affect­ed user told BeIn­Cryp­to: “I am new to cryp­to and thought Binance was the best. Until I had a prob­lem, I real­ized that some­times they are accom­mo­dat­ing, and some­times they don’t help at all.”

A Widespread Issue

Anoth­er user in Cana­da was also left in lim­bo after using Binance’s P2P trans­fer sys­tem. When this user shared their sto­ry on Red­dit, a Binance mod­er­a­tor delet­ed the post: 

A Reddit thread highlighting problems over Binance’s P2P marketplace Source: Reddit
A Red­dit thread high­light­ing prob­lems over Binance’s P2P mar­ket­place Source: Red­dit

Binance has faced a fair share of hic­cups with reg­u­la­tors, espe­cial­ly in the UK and Aus­tralia, and it’s now caus­ing issues with cus­tomers in those regions:

Those who actu­al­ly did get a reply from the sup­port team at Binance were left aggravated: 

One user, while speak­ing to BeIn­Cryp­to on Twit­ter, stat­ed

“This is unre­al… fail­ure to with­draw funds via Binance. Then they ask you to ‘appeal,’ wait­ing three days for the result to see if you can with­draw your own mon­ey. [email pro­tect­ed]@ing crazy.”

While users across the globe have echoed sim­i­lar prob­lems, the team at Binance con­tin­ues to send out auto­mat­ed messages:

What do executive members representing Binance have to say? 

To get some clar­i­ty, BeIn­Cryp­to reached out to Binance for com­ments. The only response received thus far was from a rep­re­sen­ta­tive who said, ‘let me check on this and get back to you.’ 

While wait­ing for an offi­cial response, BeIn­Cryp­to did find some poten­tial answers to some of these problems.

A law firm that han­dles Pol­ish P2P mer­chants claims that Binance start­ed block­ing P2P accounts that make mul­ti­ple trans­ac­tions of the same amount and from the same per­son. This could be in line with changes made to the P2P lat­est amend­ments to the pol­i­cy released on Jan. 31. 

In the video above, the lawyer asserts that: 

“Ulti­mate­ly, the best prac­tice would be to do only one and diver­si­fy the pool of peo­ple you work with as part of P2P. Unfor­tu­nate­ly, the reg­u­la­tions do not spec­i­fy how many trans­ac­tions mean repeat­ed coun­ter­par­ty. Based on my clients’ expe­ri­ence, most often, the lock can be applied with the 4th oper­a­tion. Fur­ther­more, you shouldn’t do many small orders in a short time and one by one.”

Recommendations for Using P2P

He also rec­om­mend­ed avoid­ing trans­ac­tions that are rel­a­tive­ly close in val­ue such as EUR 2,000, EUR 2,100, or EUR 2,500. In addi­tion, it is also unde­sir­able to divide a more sig­nif­i­cant trans­ac­tion into small­er ones. For exam­ple, an order for EUR 10,000 should not be bro­ken into five trans­ac­tions of EUR 2,000.  

Remem­ber, these sto­ries are only anec­do­tal at this point in time. It’s pos­si­ble that Binance, like any oth­er cryp­tocur­ren­cy exchange, may expe­ri­ence tech­ni­cal issues that could pre­vent users from with­draw­ing their funds. It’s also impor­tant to keep in mind that that cryp­tocur­ren­cy exchanges are sus­cep­ti­ble to hack­ing and oth­er secu­ri­ty threats, so stor­ing funds in a secure cold wal­let rather than leav­ing them on an exchange is always recommended.

Disclaimer

All the infor­ma­tion con­tained on our web­site is pub­lished in good faith and for gen­er­al infor­ma­tion pur­pos­es only. Any action the read­er takes upon the infor­ma­tion found on our web­site is strict­ly at their own risk.



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