- At the request of the Dutch police, the exchange blocked the funds of some Colombian users.
- Binance clients have stated that they plan to take legal action against the exchange.
- The ongoing investigation is related to the origin of the assets of some users.
Users of the cryptocurrency exchange Binance in Colombia, declared that their accounts were suspended, and fear they have lost their digital assets. At the moment, only about 20 people are known to have been affected by the block, but it is believed that there could be more.
Some of these users reported problems with accessing their “lifetime savings,” as certain accounts manage assets for more than 1 bitcoin (BTC). The only message that Binance customers have received from the company is:
«Thank you for using Binance. Your account is currently under review by the Dutch law enforcement authorities. For more information on the status of your account, please contact the officer in charge of this case ... »
Those affected have organized, and have contacted a lawyer to investigate the possibility of taking legal action against the exchange. They claim that, after the freeze put in place by Binance, they do not have access to their accounts, nor can they see their balances.
The company, for its part, reaffirmed its commitment “to work with entities that enforce the law to ensure that the community is safe, and prevent fraudulent activities,” according to the website CriptoNoticias.
The exchange explained that “due to the nature of an ongoing criminal investigation, we are unable to comment at this time.”
Meanwhile, Dutch authorities have not issued any statement on the matter. It is only known that the block was made at the request of the Netherlands’ government to facilitate and support the investigations.
The Legal Compliance department of the exchange platform will be carrying out a “profile review” of users following the suspensions. Although some users were required to authenticate their identity, the problem was not solved.
Some clients claim that, before being blocked, they had already completed their identity verification. One such affected user said that, from the exchange house, they informed him that they are investigating whether there have been “operations with a risk address or wallet, that is, that I received funds from a wallet that is marked.”
How P2P Trading Works on Binance
Almost all blocked users said they had already carried out P2P (Peer to Peer) operations on the platform. This type of operation allows the evaluation of trader backgrounds and their reputation on the platform.
Binance has an escrow for purchase – sale operations. This means that, at the time of a transaction with a counterparty, the money deposited to make the purchase is blocked until the transaction is successfully completed or canceled.
If there is a disagreement between the parties, an appeal process is opened and a Binance customer service agent intervenes as a mediator.
Likewise, the exchange’s P2P system evaluates the reputation of buyers and sellers. Once a higher rate of successfully completed transactions has been achieved, a user’s reputation grows, and vice versa.
Lastly, when a transaction is completed, customers have the option to leave a comment about their trading experience with their counterpart.
Another user said that Binance informed him that his problem was related to the origin of his funds, and therefore, it had to prove its origin.
"I had to send proof of income of over 2 million dollars, income statements, and bank statements to verify address and investment support,"
On The Flipside
- Colombia has always been on the radar for money laundering investigations, as it is the world’s largest cocaine exporter.
Why You Should Care?
- Affected users fear that they have lost all their funds invested in bitcoin.
- Problems with the platform started a month ago, “without reason and without answers,” as Binance did not inform them in a timely manner.
- As regulations and investigations related to fraud and money laundering on platforms increase, problems such as this are highly likely to recur in the future.