More than five months ago, crypto exchange Binance had blocked the accounts of Colombian users due to money laundering issues. This prompted the users into taking legal action against the platform because it has blocked their funds. Reports have indicated that the funds that have been blocked are in excess of $1 million. The anti-money laundering watchdog in Netherlands, FIOD conducted an investigation into the funds and discovered that they were connected to financial crimes. The Fiscal Intelligence and Investigation Service had initiated the investigation into a group of citizens whose activities had been allegedly linked to money-laundering activities.
Binance had blocked the accounts of these citizens on its platform and they had been unable to move their cryptocurrency for five months now. There are some victims, such as Jairo Velez, who said that they were victims of seizure of their crypto. Jairo is part of the group that has decided to take legal action against the world’s largest crypto exchange in terms of trading volume. He said that his account had been blocked on September 29th last year and Binance had stolen what funds he had in his wallet and its officials claimed that the Dutch FIOD had the funds.
Jairo’s attorney has asked Binance to release his funds and the requirement has been sent to the exchange’s compliance office, but have not received a response. However, Velez is certainly not the only one who has suffered due to the actions taken by Binance. Another Colombian user by the name of Andrea Torrente, also had to go through the same situation and her funds were also held by the exchange. She was informed by Binance that the funds were blocked due to an investigation by Dutch authorities, along with a Dutch prosecutor.
Torrente has also decided to take legal action against Binanceand has notified the local representatives of the exchange in Colombia. However, she has received a response as yet. In fact, there are a number of users who have complained about the exchange not responding to them. Torrente said that they had asked Binance to provide the freezing order that the FIOD had issued and the exchange responded that an email from the Dutch police was needed. She said that they had gotten the same response from the exchange about six months ago. She added that the exchange closes their chat and has washed off its hands.
While no official number of users have been provided who have been affected by this action from Binance, some of them have formed a group on Telegram for creating awareness of the problem. These users have also coordinated their actions against the exchange. Legal troubles are nothing new for Binance, as it has faced problems before as well. It had recently gotten into hot water with Ontario Securities Commission (OSC) when it allowed its Canadian customers to continue their operations beyond 2021 and did not shut down, despite making a commitment to do so. But, the exchange has reiterated that it is winding down its services.