Renowned crypto exchange Binance has now confirmed that it has restricted its account access to $1 Million in crypto for a Tezos tool contributor. This confirmation comes after the platform was called out on social media.

In a series of Tweets, the crypto exchange mentioned that it restricted the account of Tezos staking rewards auditor Baking Bad and the reason cited was “the result of a law enforcement request”. Crypto exchange has made these statements because of allegations that it had frozen and wiped the account “without any explanations”.

Baking Bad, the Tezos contributor alleged that the exchange had blocked its access to its corporate account which accounted for Bitcoin, Ethereum, Polygon and Tether along with other tokens ever since the beginning of July.

This claim was denied by Binance. The accusation by the Tezos contributor was made on August 25 on Twitter.

The platform stated,

BakingBad is well aware of [Binance’s actions], as he was already advised of this multiple times and provided the LE contact form through our support chat system on 7/6, 7/12, and 7/22. Attempting to mislead the community in regards to your case will not change anything, unfortunately.

It further added,

Binance is required to cooperate with such requests, the same as any other exchange. There is a process to contest the seizure with the agency should you wish to pursue that path. But that is done through the agency, Binance has zero control over that process.

Ambiguity Around The Law Enforcement Agency

There is less clarity around which law enforcement agency crypto exchange was talking about.

This is because a particular law enforcement agency can’t be signalled out owing to the platform’s subsidiaries that are operating in various countries across the world.

Baking Bad’s origin can be traced back to Estonia. Many companies from the crypto industry have been functioning out of Estonia.

Baking Bad mentioned that several requests were made through the DoJ (Department of Justice). It also mentioned that after an enquiry, DoJ is supposed to provide information within a number of 20 days.

The company however stated that they were yet to get information about the issue and that it has been over two months.

Baking Bad also said that it passed Binance’s corporate know-your-customer policy (KYC) on April 25.

Even after meeting the KYC requirements, Binance is yet to send the letter to Baking Bad’s corporate address. Both physical, as well as an email, is missing from the exchange’s end, yet they have blocked the account’s funds completely.

Binance Has Been Complying With Law Enforcement Agencies And Authorities

Binance remained quite submissive and cooperative to other law enforcement agencies and regulatory bodies. Previously Law Enforcement Agencies had imposed sanctions on Russia-based entities and individuals, especially with the start of the war in Ukraine.

Earlier this year in the month of April, Binance restricted accounts of Russian nationals and residents. Users could not deposit or trade Binance’s spot, futures and custody wallets and that also included stakes and earned deposits.

Bitcoin was priced at $19,900 on the four-hour chart | Source: BTCUSD on TradingView

Featured image from UnSplash, Chart from TradingView.com