Owing to requests from the law enforcement agencies, Binance crypto exchange froze account access for a Tezos staking rewards auditor named Baking Bad. This corporate account had a sum of $1 million (roughly Rs. 8 crore) in the form of Bitcoin, Ether, Polygon, and Tether. Baking Bad, in a thread of tweets claimed that no information was shared by Binance before the crypto exchange decided to restrict access to Baking Bad’s account. For now, it is also unclear as to which law enforcement agency ordered Binance to take the action. As per Baking Bad’s LinkedIn page, the entity claims to be based in Estonia.
In a Twitter conversation with Baking Bad, Binance claimed that the entity was aware about the law enforcement request.
Binance was replying to Baking Bad on a Twitter thread that claimed that its account had been sealed shit since July 1 without any explanations and that their balances of over $1 million (roughly Rs 8 crore) were set to zero.
Our corporate @binance account is blocked since July 1 without any explanations. Today all our balances were set to zero (more than $1M). We have all the materials to begin the investigation and inform the community, but for now just stay away from Binance and @cz_binance #SAFU pic.twitter.com/PpZSBhYpZS
— Baking Bad (@TezosBakingBad) August 25, 2022
The crypto sector, that usually prides itself on giving its community members the freedom to access their deposits anytime and from anywhere, has been seeing several cases where exchanges have frozen accounts, defying the sense of freedom they promise their customers.
In April, the exchange restricted accounts of Russian nationals and residents so they could not deposit or trade using Binance amid Russia’s war with Ukraine.
Not just Binance, other crypto-related firms have also come into the limelight for restricting account access for users.
After Celsius lawyers recently claimed that custody account holders may have lost the ownership of their assets, these users have joined forces against the crypto lending firm to get the collective amount of $180 million (roughly Rs. 1,415 crore) in question back.
Celsius filed for bankruptcy earlier in August. The company is trying to retain the funds of custody users who used Celsius for storage, not to put their money to work.
For now it remains unclear how Binance and Baking Bad will handle the situation going further.
Given these back-to-back incidences of accounts being frozen by exchanges, industry experts have advised crypto community members to use self-custodial wallet services or hardware crypto wallets.