Binance User Claims Exchange Has Stolen 1200 BTC ($8 Million) After Locking Account

A poster on Reddit’s cryptocurrency subreddit is claiming that Binance has blocked access to an account containing 1200 bitcoins – or about $7.8 million USD.

According to /u/skilledguyfx, Binance “blocked my old, active account that was 3d [third] level verified and full of 1.2K BTC.”

The user created the account for arbitrage trading. According to the user, “everything was good for a long time before Binance decided to block it.”

“Since then I’ve had a long conversation with their representative where I provided all my documents (even more than it was necessary), passed video verification and fund verification as well.”

Despite providing Binance with all of this information, the user claims to still be blocked from the account. Binance claims there are two reasons they have blocked the user from the account: “security” and “law enforcement”.

“During our conversation they changed the reason for blocking my account a few times and as a conclusion it’s still blocked. The first reason was “security” the last one was “law enforcement” which they don’t want to connect me directly with. And you know what, I don’t believe them at all.”

The user claims that the bitcoins did not come from a shady source. /u/skilledguyfx claims to only make deposits and withdrawals with top 10 cryptocurrency exchanges. Additionally, the user hasn’t made withdrawals to any new addresses for the last month, and all previous withdrawals were to the user’s own address. All withdrawals can be traced to well-known cold storage wallets of respectable exchanges.

After reporting all of the information above, skilledguyfx has a simple request:

“I just kindly ask the official Binance representative to let me know that an investigation about the account has been started.”

Binance is almost certainly aware of the issue. The post has reached the top of Reddit’s cryptocurrency subreddit. Binance, however, has not publicly responded to the user since the post was made earlier today.

Many users suspected that Binance has flagged the $8 million account for participating in criminal activities. Here’s what one of the top responses from PapaDock820 says:

“If law enforcement is in your sh*t then you can't expect a clear response from Biance [sic]. I've been telling people here but no one wants to believe me, but you don't have to do anything illegal to attract law enforcement. You just have to appear to be doing illegal activities. 1200BTC is a lot of money, big enough to be looked at for money laundering or other criminal activity.”

If the user is genuinely being investigated for criminal-related activity, then it makes sense for Binance to stop responding. It’s possible that law enforcement authorities haven’t told Binance much information about the account. Or, it’s possible that Binance is waiting to hear back from law enforcement.

Ultimately, all of this shows that your bitcoins are only safe if you own your private keys. If you leave 1200 BTC on an exchange, then you’re running the risk of losing a substantial amount of money.

You can follow the saga as it unfolds on Reedit here:

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