According to Binance, 90% of the suspended crypto accounts brought on by Bitzlato investigation have already been unblocked.
In connection with the Bitzlato investigation, cryptocurrency exchange Binance has been quietly closing down a number of accounts on the platform. Several Russian-speaking Binance customers complained about blocked accounts and being unable to withdraw money from the exchange on January 18.
The affected users complained about the problems in a Telegram group chat, claiming that the accounts had been shut down abruptly. The group’s members, who number over 1,000 at this point, immediately compared the blockages to the US Department of Justice’s enforcement action against the crypto firm Bitzlato.
Binance was listed by the U.S. Financial Crimes Enforcement Network as one of Bitzlato’s top Bitcoin (BTC $22,722) counterparties. The use of Bitzlato, including incoming and outgoing transfers between Bitzlato and Binance accounts, has been freely acknowledged by many discussion participants.
A few impacted users also voiced shock and perplexity over the measures taken against Bitzlato. A representative of the crypto exchange confirmed that Bitzlato was actually to blame for the most recent suspensions.
“Last week, our compliance and investigations team, in relation to the Bitzlato case, suspended some users’ accounts from several countries, including in Eastern Europe and the CIS,” the representative stated.
The representative for Binance underlined that most of the suspensions were brief, saying:
“At the moment, more than 90% of the accounts have been unlocked, users have been notified about this. All funds are safe. Affected users — less than 20 — have been provided with relevant law enforcement contact information.”
The cryptocurrency exchange also suggested that users read Binance’s article on the various causes of account blocking on Binance as well as what to do in such a circumstance.
As was previously mentioned, Bitzlato was a little-known cryptocurrency trading platform that let users trade digital currency through an exchange and peer-to-peer platforms.
The platform is known to maintain significant operations in Russia and is said to do so from the Moscow skyscraper known as the Federation Tower.
The U.S. government claims that Bitzlato operated without following proper Know Your Customer procedures, which contributed to its development into a “haven” for criminal proceeds and money intended for use in criminal activity.
