Binance Froze Corporate Account Worth $1 Million Over Law Enforcement’s Request

One of the world’s most renowned crypto exchanges, Binance recently confirmed that a Tezos tool contributor was recently restricted from accessing their account holding $1 million worth of crypto.

Binance’s clarification

Last week, Binance disclosed via a Twitter thread that a request from law enforcement prompted the exchange to restrict the account of BakingBad, the auditor of Tezos staking rewards.

According to the Tezos contributor, Binance had restricted it from accessing its corporate account that contained Tether (USDT), Polygon (MATIC), Ether (ETH), Bitcoin (BTC), and other tokens.

It was further alleged that access to the account had been blocked since July 1st, but Binance denied these claims.

The largest crypto exchange in the world in terms of trading volume, Binance stated that BakingBad was aware of the actions of the exchange.

The company said that the Tezos contributor had been advised of the same several times and their support chat system had also provided the LE contact form on 7/6, 7/12, and 7/22.

It also said that trying to mislead the community regarding the details of the case would not change anything.

Law enforcement

The crypto exchange said that like other exchanges, it also has to cooperate with such requests. It further said that if anyone wants to contest the seizure, there is a proper process to be followed.

However, Binance said that this has to be done through the agency, as the crypto exchange does not have any involvement in the process.

It should be noted that Binance did not clarify which law enforcement agency it was talking about, considering the fact that the crypto exchange operates in a number of countries in the world.

The LinkedIn page of Baking Bad showed that the platform operates out of Estonia, where Anti-Money Laundering (AML) restrictions were introduced for companies offering crypto-related services back in February.

Compliance with authorities

Previously, Binance has shown its compliance and deference to many regulatory authorities and law enforcement agencies that had imposed sanctions on companies and people based in Russia.

This was after the country invaded Ukraine back in February. In the same month, a spokesperson for the crypto exchange had said that it would not freeze the accounts of millions of innocent users unilaterally.

This statement had come in response to the request of Ukrainian president to crypto exchanges to block the accounts of Russian users.

However, Changpeng Zhao (CZ), the chief executive of Binance, had stated that Binance would comply with the sanctions imposed on Russian individuals and entities just like traditional financial institutions.

The accounts of Russian residents and nationals had also been restricted by the crypto exchange in April. This prevented them from making deposits or trading using Binance’s custody wallets, futures, or spots.

Moreover, they were also not permitted to access earned and staked deposits. This was in accordance with the sanctions that have been imposed by Western nations against Russia over its military invasion of Ukraine.