Binance, the cryptocurrency exchange linked to the Bitzlato investigation, has been quietly shutting down multiple accounts on the platform.
On Jan. 18, a group of Russian-speaking Binance customers complained that their accounts were frozen and they were unable to withdraw funds from the exchange. Affected users created a Telegram group chat to report the problem and said accounts were blocked without warning.
Members of the group now numbering more than 1,000 were quick to draw parallels between the U.S. Department of Justice’s blockade of cryptocurrency firm Bitzlato and its enforcement actions. US Financial Crimes Enforcement Network Also Lists Binance as Top Bitcoin, Bitzlato's counterparty.
Many chat members openly admitted to using Bitzlato, including transactions in and out of Bitzlato and Binance accounts. Some affected users also expressed anger and confusion over the actions against Bitzlato.
“Although I haven’t been banned anywhere, I just lost some on BTC-e, Wex, and now Bitzlato, but I think the bans are lawless,” wrote one chat member. “Bitzlato related blockade is nonsense. They have not been proven guilty, only charged, how can this money be dirty?” asked another user.
The cryptocurrency exchange also advises users to check out Binance’s article to learn about the many reasons why their Binance account might be blocked and what to do in that case. As previously reported, Bitzlato is a little-known cryptocurrency service that allows users to trade cryptocurrencies through exchanges and peer-to-peer services. The platform is known to maintain significant operations in Russia, allegedly operating from the Federation Tower skyscraper in Moscow.
According to the U.S. government's allegations, Bitzlato operated without proper "know your customer" procedures, making it a "safe haven" for proceeds of crime and funds used in criminal activities.
