Binance Crypto Exchange Faces Withholding Funds Allegations

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

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

Then things got worse when he announced that customers of the exchange would not be able to withdraw amounts below $100,000 through the SWIFT global payment network.

Binance was also forced to shut down some accounts linked to the Russian-based exchange Bitzlato after it discovered that it had used Binance to illegally funnel funds. More recently, it turned out that there was a mix of funds and client wallets linked to its B-Tokens, which are wrapped assets that can be linked to different networks.

P2P users demand answers on lost money

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

P2P traders are individuals who buy and sell cryptocurrencies directly with each other without the intervention of a central authority. They use platforms such as Binance P2P to facilitate transactions. These traders usually 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 increased privacy and security.

A Reddit user who goes by the handle u/minghuaa was one of the first to call the exchange. In a Reddit thread, the user wrote that Binance ruined his life after he was unable to withdraw his savings through Binance’s P2P marketplace. Despite the verification, Binance’s customer support team claimed that 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 problem

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 issues in the Binances P2P market Source: Reddit

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

Those who actually received a response from the Binance support team were annoyed:

Oh? Want to withdraw money from Binance? Your account is now under review, and keep asking you for documentation and keep telling you it’s not enough. Block you in order to keep your money to stop a bank run.

Thanks for playing. We tried to warn you. pic.twitter.com/PeZssKmeks

— Bitfinexed (@Bitfinexed) February 1, 2023

One user, while talking to BeInCrypto on Twitter, said:

This is unreal…failure to withdraw funds through 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 around the world have echoed similar issues, the Binance team continues to send out automated messages:

What are the executive members representing Binance saying?

For clarification, BeInCrypto reached out to Binance for comment. The only response received so far was from a rep who said let me check this and get back to you.

While awaiting an official response, BeInCrypto has found potential answers to some of these issues.

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

In the video above, the lawyer claims that:

Ultimately, the best practice would be to go all in and diversify the pool of people you work with in P2P. Unfortunately, the regulations do not specify how many transactions mean repeat consideration. In my clients’ experience, most often the lockout can be applied on the 4th trade. Also, 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. Moreover, it is also undesirable to divide a larger transaction into smaller ones. For example, an order of EUR 10,000 should not be split into five transactions of EUR 2,000.

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

Disclaimer

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

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