Topic: Be careful using Binance & Centralized Exchange (Read 154 times)

What's the situation in Greece regarding centralzied exchanges and your tax office, did they start checking that as well?

I am asking because I heard about some people in Croatia getting calls from our tax service and they had the whole Binance transaction history meaning and of course they didn't report profits. 

Would you happen to know how many hops was the mixer connected address from your binance deposit address?

I've used m-i-x-ers/tumb-ilng before and it's a general advise to not deposit mixed funds directly to any CEx. How many address jumps at minimum remains a hit or miss -- though the amount could have a heavy influence on this as well.

If exchanges are automatically digging 'deep' into parent transactions, i'm expecting a surge in false positives.

No, they haven't asked for any additional documents at all. I had ready documents from where and how I got the funds. I haven't used mixers and we can't control others if they are using mixer and sending funds to my address. But yes, I am lucky they unfrozen my funds and let me withdraw everything. Funds weren't transferred directly from the mixer. But the address sent to me was connected to mixers. Most likely, that's why they unfroze my accounts. 

15 BNB is a very large amount but Binance will obviously freeze your account if the funds come from a mixer then this will be strictly prohibited to comply with its rules, but you are still lucky because you still have permission to make withdrawals even though the trading feature is disabled.

If that wasn't the source of Tornado Cash maybe this wouldn't have happened but thankfully your funds are now safe in a hardware wallet.

Anyway, I wouldn't keep a lot of money on the exchange let alone receive large amounts from someone you don't know, it's better to move it to a personal wallet this is much safer that we know.

As others have already suggested, you're lucky that you were allowed to withdraw the funds. I believed that people would have learned their lesson after having their accounts go under investigation when the whole mixer situation occurred. That's on you, not the exchange to blame.

Receiving funds directly on exchanges isn't advisable, and I believe you now understand why. On top of that, centralized exchanges have all your personal details, and receiving such amounts of cryptocurrency from unknown sources could raise red flags in your account, and you may also be subject to paying income tax if you were put under further investigation.

Receving from random people is not the only problem as you should be careful who are you sending your money to.

Last year Binance froze my withdrawals for no reason at all and to prove that I am the owner of the account they pulled out one withdreawal I made like 2 years ago, satrted asking bunch if questions etc. Luckily, that withdrawal was done to my irl friend and I had all the proofs they needed but I can imagine things getting way more complicated if I was paying someone for some dodgy service.

At least you're allowed to withdraw your funds. Binance could have locked those funds knowing that it went through Tornado Cash, a mixing platform sanctioned by the DOJ. It could have been a valid step on their part. Binance, after all, is highly compliant with government regulations. They've probably learned their lessons. They have a huge business to protect.

Perhaps it should be made part of our safety measures to inquire from anybody sending funds to us where the funds would be sent from. There are centralized exchanges that don't welcome funds sent from crypto casinos, mixing services, among others. Such funds could cost us our accounts.

Don't blame them, you made the mistake of receiving your coins directly on Binance exchange, Binance is an exchange and not a wallet to receive or store funds. We have to use our personal wallet to receive coins then we can send them to any exchange we want to use for trading whether it's a centralized exchanges or decentralized exchange depending on what we want to use them for and the best exchanges that offer those service. What Binance exchange or other centralized exchanges are doing is kind of annoying but they have to protect their business because they'll be the ones the government will come after when they discover that their exchange is being used for money laundering or other illegal activities.

Alot of people using exchanges to receive their coins are doing so because they want to save fees but it's better you spend money on transaction fees than to lose access to your coins because of problems you know nothing about. The lesson here should be, if we must use centralized exchanges, it should only be used for trading and nothing else. When we use them for what they weren't meant for, we are putting ourselves at risk of so many things. The coins you received, you don't know where they're sending it from as they can send you fraudulent coins that are being tracked and you fall a victim. I'm glad you didn't have any loss unlike other unfortunate situations.

They have it on their TOS that suspicious activities will be taken into account and we have to monitor our transactions where funds are coming from and they don't mind where it is coming out. But on your case, you didn't know that your client has used a mixer and sent it to your account which is a normal thing if getting paid in crypto is what you prefer. So before receiving, always use a spare wallet address that has never been used.


That suspicion they have is right on that your client have used tornado cash. I don't know how they do it but they have tracking addresses where the funds are coming from. It's nice that you're able to withdraw still your money and they didn't frozen it.

This happened before when one of the members was working in one of the mixer signature campaigns here, and he was receiving payment on his account in Binance. After the mixer was seized by the FBI, Binance asked him for many requirements and proofs, such as Proof of the source of funds after his account was restricted. I'm glad you could successfully withdraw 15 BNB from Binance, which equals $8,427 at the current price. It's truly not a small amount to lose due to someone else's fault, not yours, especially when your client was responsible for using one of the mixers, which does not comply with the regulatory ideals of these CEX.

Indeed, any client of Binance or a centralized platform is subject to their changing rules and conditions, KYC and AML procedures, etc. They can restrict or close the account at any moment if they find any direct or indirect violations from the customer. Therefore, to avoid the headache of these centralized platforms, the advice is to stay away from them completely and not deposit funds from unknown sources or in large quantities.

I'm curious if they never asked you any personal information particularly those which may be considered intrusive by many?

If so, it ain't bad. Don't get me wrong, 45 days sucks but I reckon other custodial platforms may have taken a harsher approach as most of them have always been prickly with mixers/tumbling/coinjoin services most especially these past few years with all the seizing and whatnot.

I know how annoying it is to have one of your accounts banned especially if you use it for work. However, I believe their decision was justified since the deposited coins came from a sanctioned mixer which is known for being involved in money laundering activities. You should be thankful they let you withdraw your money, other exchanges wouldn't do the same.

If you are not certain where your clients get their coins from, better ask them to send them to your personal wallet before depositing them into a centralized exchange.

I have been hearing many similar stories about binance recently and the stories are more or less the same. One of the victims said his account has been locked for more than 6 months and binance’s so called “investigation” is still ongoing. Binance won’t give an explanation of what’s going on too. They’ll feed you with the generic automated responses. I don’t really hold any big amounts on binance because of that. You’ll never know when you’ll be the next victim of theirs. You’ll wake up one morning and you’ll see “your account was locked due to blablabla” and then good luck with the waiting game as it will drive you mad probably.

I still hold some coins on binance but I can say fu to them if they ever lock my acc like that.

Since it's already sanctioned mixer, It makes sense and worse still Binance is still having issue with regulators over "assisting" money launders to launder money through their platform. I don't think they are ready for more fines and sentencing.

These are the things Binance never used to do. Times have changed

At least, I am glad they let you withdraw your funds.

A few days ago, I had an issue with Binance. For my marketing services, I had been receiving funds in my Binance account. One of my clients sent me 15 BNB there, and he had used Tornado Cash to mix his BNB. I had used Binance for trading; hence, I received funds there to increase my portfolio. So after receiving funds, Binance froze my account. Even they don't ask for any explanation.

When I contacted support, they said the account was under investigation and it would take 30 working days. 
So I wait and write them on their social media as well. So almost after 45 days, they enabled my withdrawal but disabled all kinds of trading. Though it wasn't my fault and I am unaware of how clients sent funds, I suffer for that. Thanks to God, at least I was able to withdraw all the funds from Binance. I don't care, even if they don't allow me to trade there. So I moved all the funds into a hardware wallet. 

This is a lesson for everyone who has been using centralised exchanges. Don't receive funds in exchanges from random people, and don't store your funds there. The account would freeze at any time for any reason.