Many people are putting entire life savings in an exchange they trusted, Binance. They feel safe when some entity is responsible for guarding their funds and reimbursing them in case of unexpected fund loss. You may be one of these people. Here we will show you the risks associated with using a Binance account to store your life savings.

Is Binance safe?

Yes and no. Binance is similar to the centralized bank. It has an advantage in user experience. It’s easy to use, and someone is protecting your fund for you. You don’t have to worry about the compromised private key problem that steals all your life savings in seconds. In case your fund has been stolen, you can go to the police station to have someone reimburse your loss too.

The downside is that government agents such as the FBI can force Binance to block and seize your account anytime without any reason. Imagine your entire life savings are in your Binance account, and the FBI forces Binance to block your account for investigation. You will lose access to your account entirely, although you have done nothing wrong. During the investigation, you must borrow money from other people to live. FBI and Binance don’t care anything about you. They have absolutely no empathy. In the worst case, if the investigation results indicate that you are guilty, the FBI may seize all your hardworking earnings, put you in jail, and you have nothing to do.

Why should I be concerned about the FBI since I have done nothing wrong?

Transaction tracing is a complex art. If you were FBI given a mission to solve the money laundry problem in the binance, what you can do is suspect any account with an enormous transaction and all accounts linked to the suspected account.

As Binance is similar to a centralized bank, to flag accounts with an enormous transaction, the FBI is likely to use cutoff values from a centralized bank system to flag whether a statement is suspected of money laundering or not. However, you shouldn’t be flagged if the FBI can trace all transactions to traditional bank accounts.

When an account is flagged, the FBI will likely flag any account that has interacted with that account (sent/received funds). So, you will also get flagged if you have done any business with a flagged account.

99% of flagged accounts may not involve in any single money laundering. But the FBI doesn’t care, as they want people to stay away from crypto in the first place. FBI only cares about seizing 1% of those suspected accounts linked to money laundering.

How long can the FBI block your account?

In short, your account will be locked until the FBI has finished its investigation.

Wait, how long it takes for the investigation to finish? It can take forever. In case it takes forever, it is as same as losing your fund.

Do you have proof that the investigation may take forever? Yes, this guy’s account got locked in January. Now, nine months have passed, and Binance was also not giving any helpful information.

Does the account lockdown limit to Binance US?

No, there is proof that Binance is locking a group of whale accounts from Thailand. Tantai, a famous Thailand crypto idol, and his friend’s accounts are locked by Binance. The only reason they get from Binance is that FBI is investigating their account. Referenced from a Siam Blockchain news.

The journey and proof of Binance locking accounts

Binance is always locking accounts for no reason. You can search for this scandalous behavior on Google using the keyword “binance lock account Reddit.” Some of them occur on Twitter and local news websites too. Here we will highlight important events in Binance locking accounts.

In May 2021, Binance was forcing all US customers to withdraw all funds from it in 48 hours without any further notice. Seriously, withdrawal is limited to 2 BTC per day as all US account KYC statuses reset. All accounts with more than 4 BTC ultimately lose their fund! Referenced from this reddit post.

There is a report back in October 2021 that Binance locked an account of a business owner who has had her account with Binance for over four years and has the advanced verification completed. That account is locked without any reason.

Another guy is putting her life savings in her Binance account. Suddenly, Binance locked her account. And she needs her funds in an emergency to pay hospital bills. Such a heartbreaking story!

Another batch of account locking originated on February 2022. This Reddit post records the history of Binance locking accounts. But this batch may not be related to the FBI. Instead, Binance wrongly sends ALGO token worth less than $5 to these accounts. Binance should only suspend the withdrawal of ALGO tokens. Since it isn’t the user’s fault, Binance shouldn’t lock their accounts.

In Q3 2022, Baking Bad, a famous person, reported that his corporate accounts got locked due to being investigated in a law enforcement request. As a result, Binance and FBI rug all their funds in his account.

Many people are also reporting that Binance has locked their accounts in the comment of Baking Bad’s tweet. Some also lost funds due to non-sense reasons!

One also reported that Binance is banning Russian accounts. Wait, Russian people aren’t associated with the war and may not agree with the Putin’s decision.

Recently, the Binance account locking news has gone wild. Tantai, a Thailand whale, and his friends have their accounts locked by Binance. Binance only said that the FBI is investigating their accounts without further reason. Referenced from a Siam Blockchain news.

Can I still use Binance?

You can still use Binance for trading and hold only a portion of your funds in it. You shouldn’t have more than 50% of your life savings in your Binance account. It is also great to limit funding in your Binance wallet to less than $100k.

It would be best if you considered multiple alternative ways to keep your life savings. Stay tuned for our next blog about this and wallet security. Remember to follow UpIntern’s Twitter and UpResearch’s Medium too.

Summary

Don’t put your entire life savings in your Binance account! A person needs her funds to pay hospital bills in an emergency, but Binance has suddenly locked her account. Such a heartbreaking story! Account locking is not limited to US accounts. Binance also locked a famous Thailand whale account due to an FBI investigation.

Moreover, his friend’s accounts are locked by Binance too. However, you can still use Binance for trading, but don’t hold more than 50% of your life savings in your Binance account. It would be best if you considered multiple alternative ways to keep your life savings. Stay tuned for our next blog about this and wallet security. Remember to follow UpIntern’s Twitter and UpResearch’s Medium too.