The names of all clients cited in this article have been replaced by pseudonyms to protect their privacy.
Take Gregory Hitchens, for example. When he opened his Binance US account last year, he thought he was doing the responsible thing by moving his funds off Binance’s original exchange to deposit them onto the Uncle Sam-approved counterpart, as he was prompted when Binance began sweeping U.S. users off its main exchange in 2020.Read more: Binance Ramps Up Crackdown on US Users, Giving Them 14 Days to Withdraw Funds
But then Binance.US froze his account for what he called “little to no reason.”
“I traded in some harmony tokens for [U.S. dollars] and couldn’t withdraw them,” Hitchens told CoinDesk. “Then Binance informed me that the hold was because of a $20 chargeback on my account for a transfer I never made.”
Hitchens paid the chargeback to reconcile his balance on Feb. 8, but he received emails from Binance complaining about the chargeback still a week later, according to screenshots shared with CoinDesk.
Out of desperation he sought information online and wound up texting the mother of Binance.US CEO Catherine Coley so he could get his funds unstuck. Now, Binance is closing his account. (And, by the way, Catherine Coley is stepping down, to be replaced by former Acting Comptroller of the Currency Brian Brooks).
Hitchens was able to retrieve his cash, but a dozen or so Binance.US users who spoke with CoinDesk still have their coins stuck in limbo. And the problem is larger than the U.S. Clients from Binance’s primary exchange and Binance Australia have also been affected, per documents shared with CoinDesk.
Many of the affected Binance users flagged for “risk management” and anti-money laundering (AML) hold accounts that are fully verified; given that know-your-customer (KYC) verification process is a risk management process to prevent money laundering, Binance’s stated purpose for freezing these accounts leaves unanswered questions.
Binance declined an interview with CoinDesk to discuss these issues, but the CEO issued a statement that chalked the problem up to “compliance issues” and anti-money laundering risk factors.
Binance declined a phone interview with CoinDesk to discuss the locked accounts and the painstaking verification process Summers and others went through. CEO Changpeng Zhao issued the following comment:
We have very strict risk controls in place, firstly to secure user funds and secondly to adhere to local regulatory requirements.
Our top priority is user security. Accounts flagged for suspicious activity, whether it is an attempted hack or failing audits required by our AML standards, are suspended during pending investigations. Each and every one of these cases require individual attention and may require additional information from users for verification.
Still, as some users attempt to verify themselves, they’re having trouble recouping control of their accounts – or getting hold of a living, breathing Binance representative to resolve the issues.
Logan Brown, for example, had several thousand dollars worth of BNB coins locked in his Binance.US account for months.
Brown neglected to fill out the memo field for these coins when he deposited them on the exchange, which apparently caused Binance to not credit his account with the sum. He said this “must be very common” because he was directed to a webpage with recovery instructions for that specific issue. After following these steps, he received an email saying his account would be credited in five days.
Brown submitted the requested documents in January. It wasn’t until mid-April he recovered the funds.
He said that during his repeated requests to have his funds unlocked, he received “vague” emails that said his “memo case is not on hold.”
“I believe many others are in the same boat,” he said.
A quick glance at the replies in this tweet from Binance.US Customer Support shows how many others are piling into the boat.
The tweet was first posted a year ago. Since then it has amassed a pile of tickets complaining of locked accounts, frozen trading and uncredited deposits. Many complain of Binance taking these actions without warning or proper justification.
Buffy Summers had her account of nearly four years suddenly flagged for risk management after she initiated a withdrawal of ADA (-9.33%) (the native token of the Cardano blockchain) on Feb. 28, a few days after she completed “advanced verification” on Binance Global. Support asked her to provide proof of deposit for her coins, even though she purchased the coins in 2018 on Binance using Canadian dollars through one of Binance’s partners, Simplex.
She said she was asked to provide more than 15 videos as evidence of her funds’ provenance, some of which were impossible to upload because the video files ended up being larger than Binance could accept. Summers clarified that she is not using a VPN when accessing Binance, something that has raised flags for the exchange’s compliance software in the past, according to her conversations with Binance support.
Summers is compiling a document of complaints from other customers who are experiencing similar difficulties.
“Customer Support is also asking me to do impossible things which the Binance website doesn’t support, such as uploading pdf files in the chat function, when the chat does not support such files,” said one such user. “I was also asked to make a bank transfer appeal by customer support, I did this and I got an email response saying the appeal was rejected due to ‘risk control.’”
“It has been two months since I first asked Binance about this issue. I have gotten basically no help in solving the issue, these funds are mine to withdraw by legal right and if this problem persists I will be forced to take legal action, which would be a waste of time and money for everyone involved,” the complaint reads. Its author added that while they can’t take any funds out of the exchange, they can still put funds into it and make trades.
In this document, one customer of Binance.US complains of $200,000 locked. “I have had a Binance.US account for over a year. I am still getting the same ‘withdrawals suspended due to risk management.’ I have had my past tickets closed for trying to get help on what additional info they need from me to mitigate risk and no response,” the user said.
Another former Binance.US client claims that a $59,000 BNB deposit, which had been verified it was sent to the correct address, was never credited to their account.Read more: Using Binance to Trade Coinbase, Tesla, Apple? Here Are the Risks
One Binance Global user says they’ve had ETH (-9.31%) locked since December of last year. Another Binance Australia user had their account locked for “being at risk” even though “prior to this I was fully verified – license, bank, proof of address.”
“Now I tried to talk to Binance support and they asked to prove it was me and requested I submit a video of me recording my face, Binance deposits and my bank statements. I did this and got rejected,” the user said.
Yet another user experienced a similar frustration: “Same ‘risk management’ shutdown on my account withdrawals. No response in 2 weeks to video upload with U.K. passport etc.”
In response to complaints in the replies of its Customer Service Twitter thread, Binance routinely blames Amazon Web Services for the account disruptions. Some users CoinDesk spoke with had their tickets resolved after months, but others still have unresolved issues.
That’s because getting hold of actual Binance representatives is more difficult than not.
“I’ve been looking for any contact info for any humans at Binance … it’s not public,” one user, James Mallory, told CoinDesk.
In fact, Mallory had to use ZenDesk, a third-party help desk, to try to resolve his problem when emailing failed. Binance uses ZenDesk to manage its customer support, but Mallory couldn’t even get in touch with a Binance rep on this platform, instead speaking with a ZenDesk employee.
Summers could only retrieve her funds after directly messaging the CEO of Binance Australia, Jeff Yew. Much like Hitchens’ contact with Coley via her mother, this outreach resolved the issue instantly. Also like Coley: Yew is no longer with the company, having departed in April.
Per the document Summers compiled, plenty of users are still waiting for their funds to be unlocked. One has been waiting for nearly a year, Summers told CoinDesk.
The “shotgun” KYC that U.S. Binance users have experienced isn’t exclusive to Binance, though admittedly other U.S.-restricted exchanges (like BitMEX) often give users the ability to withdraw to an external wallet before closing the account instead of demanding an internal transfer as Binance does.Read more: Crypto Derivatives Exchange BitMEX Says All Users Are Now Verified
Moreover, as evidenced by the troubles experienced by Summers and others, these risk and compliance account freezes are happening to more than just Binance.US users. Most if not all the cases CoinDesk reviewed were flagged for risk control, even for those where the coin purchases were made on Binance itself and for users who were fully verified.
After the 2017 market mania died down, it was not uncommon for Binance.US users to forget about their coins on Binance Global, only to recall their holdings (now worth substantially more than four years ago) when bitcoin (BTC, -8.52%) hit fresh highs at the end of last year.
Binance made it explicit last year that it would strictly enforce regulations to keep U.S. users off the international exchange and encourage them to instead sign up for Binance.US to avoid repercussions. In order to retrieve the coins on their regular Binance accounts, users were required to open a Binance.US account.
But some users, depending on how much KYC information they submitted when signing up during the last bull market, still went unnoticed for some time and were only recently hit with after-the-fact, “shotgun” KYC. As with users who made the switch last year, these users were required to open a Binance.US account to transfer their funds; they were not allowed to simply withdraw them to an external wallet.
“When that bubble popped I kinda bought and forgot about the coins, but checked in every so often to see how [the account] was doing,” one user, Dave Sweet, told CoinDesk. “Recently I tried logging back in and received a message that said that binance.com was now separate from binance.us and that I had, like, 20 days to create a Binance.us account or that my account would be deleted. The site said that I could only move the coins into a .us account, I couldn’t trade, sell or extract them. I tried to make a U.S. account, but for some reason Binance.us isn’t authorized for use in Texas, so I was unable to get my coins at all on my own.”
To get his coins, it took Sweet soliciting the help of another friend with a Binance Global account (which, although also opened in 2017, was not full-KYC’d but still hadn’t been flagged by Binance). Sweet transferred the funds to this friend’s account, who then sent them to a wallet Sweet controls. This friend’s account has since been flagged and is no longer usable.
CoinDesk asked the exchange for clarity regarding already verified accounts that had completed advanced verification and used Binance-approved channels to make their purchases (like Summers). Binance refused to make any comment beyond its statement. It also declined to comment on the painstaking verification processes that for many users, so far, have resulted in weeks or months of radio silence.Binance To Launch NFT Marketplace in JuneCryptocurrency exchange Binance said it plans to launch a non-fungible token (NFT) marketplace in June. ”The Hash” panel reacts.Volume 90%