One of the world's leading cryptocurrency exchanges, Binance, responded to requests for clarification regarding the misappropriation of $ 200.000 worth of funds that were frozen from a user account in November 2018.
The crypto exchange Binance, in a statement, revealed that it had actually seized over $ 800.000 in cryptocurrencies from an exchange user at the request of South Korean law enforcement agencies.
According to Binance, the account holder allegedly received 3.995 Ethereum (ETH) via a scam acting on the listing rate. However, the user concerned claimed that the South Korean authorities had not made any official complaints against him.
The user claims that the South Korean authorities never asked to freeze the funds.
According to the report released by the account holder in Forklog, the South Korean police denied having complained about the user in question or ordered to block or transfer these funds. However, Binance provided evidence that he acted at the request of the South Korean authorities and froze the funds following internal due diligence.
The exchange also reported that it promptly informed the user of the Korean law enforcement request to seize the funds and provided him with contact information for the relevant agencies.
It appears that the exchange would have blocked $ 858.999 in assets that included a variety of cryptocurrencies including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), IOTA, Zcash (ZEC), EOS and others.
The user claims that Binance has continued to communicate with him continuously since the blocking of funds on November 21, 2018, and has not yet mentioned the return. The explanations provided by the exchange often bordered on the final dismissal of the user's account.
The account holder also filed a complaint with the Ukrainian law enforcement agencies.
The Binance user whose account was seized by the exchange also filed a complaint with the Ukrainian law enforcement authority. The exchange, for its part, reported that it was able to satisfy all requests from the agency which had acted appropriately.
The user said at Forkast that he has every reason to believe that the exchange has misappropriated his money. According to his version of the facts, Binance asked for further verification as part of its Know Your Customer and AML policy and a detailed explanation regarding the origins of the funds in question.
Once other victims of misappropriation of funds have been discovered, a class action is being prepared
Forklog's report says that the user implicated in the fact and other victims of similar dynamics are preparing a legal class action and will impose criminal charges against Binance. In fact, other similar cases have been discovered and the total damages are expected to amount to about $ 3 million.
On April 3, an avalanche of lawsuits was filed against major cryptocurrency companies in the United States for alleged sale of unregistered securities. Binance was among those companies that have been named in lawsuits.
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