Binance Crypto Exchange Faces Allegations of Withholding Funds

In Brief

• Customers across the globe are facing issues accessing their funds on the Binance P2P crypto market.
• Binance started blocking P2P accounts that make multiple transactions of the same amount and from the same person.
• This is one of many issues that have plagues the exchange since the fall of FTX.

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:
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. Fu@@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.

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