Binance has reacted to several allegations that the exchange is randomly locking out users for issues that do not really border on failure to meet up with their Terms of Service. On January 26, 2022, the exchange spokesperson said that they are aware of these issues.
On January 26, 2022, #BinanceStopScamming started trending on Twitter, with many users of the exchange making tweets of their experience with the cryptocurrency exchange.
It was mostly tales of woe as Twitter was awash with tales of lockouts, account suspensions and arbitrary closure of the account of users even when they could not put a finger on the reason why the exchange shut them out.
Binance Africa responded with a tweet, pointing out that it is aware of the issues and that the company is working on resolving them.
Dear Nigeria🇳🇬 Binancians
— Binance Africa (@BinanceAfrica) January 26, 2022
Cryptoinfowatch made some background checks on social media to ascertain if the exchange has had scam accusations leveled against it and if such allegations were resolved. What we found are issues such as this:
I used Binance for long and have no issue deposit or withdrawing at all. The last time I want[ed] to withdraw my FTM tokens to FTM network, I tired a small amount and it worked fine and then I tired to withdraw all my funds but the transaction never done, I can still see the balance on my account and the transaction show “processing” for days.. now i can do nothing, I still don’t get my funds back neither can trade!
The user said that they contacted an unhelpful Binance support in a chat that was almost as if they were interacting with a bot which kept repeating that they were working on resolving his problem or even respond with an unrelated answer. However, the stuck transaction was resolved after 4 days.
This particular user, Issamir said that the lesson he learnt was never to make a transaction involving all his funds at once. He further shared the experience of another user, whose funds were stuck in Binance for months.
It’s been 10 months now that Binance held my hard earned crypto, I have reached out to customer care severally, till now I have not been given any tangible reason for this act @binance @BinanceAfrica @cz_binance @BinanceHelpDesk #BinanceStopScamming #BinanceStealingCrypto
— Ama Judy (@AmaJudy_) January 25, 2022
Blaming Users for Issues Created By Binance
Another user reported that they made a withdrawal of 300,000 DOGE about 19 months ago, but the Binance team sent the coins with low transaction fees and they were not confirmed. 19 months ago, 300,000 DOGE was valued at just $600.
When the user raised the issue of the unconfirmed DOGE coins, Binance sent another with the appropriate tx fees and this time it went through, but they left the original transaction in the mempool. This is a small database of transactions that are not confirmed by the network. 19 months down the line with the dogechain network having lowered its transaction fee, the original transaction went through.
However, the withdrawal by the user was sent to another user as a payment. This means that the person the user was paid received double (600,000 DOGE) instead of 300,000.
Considering that the value of dogecoins has increased multiple-folds, the Binance team is actually demanding that the user who sent the withdrawal to a third-party pay for the loss. By the way, at the time of the second confirmation of the DOGE stuck in mempool, the value of 300,000 DOGE was $80,000.
Here is their story since Binance is now holding on to their own personal funds, demanding that they refund $80,000 in dogecoins.
“I am not sure where to post my problem and also do not know if anyone faces the same issue or not. Today, I have tried to withdraw few dollars from Binance. But it stuck my withdrawal by saying:
Unable to withdraw with account in arrears
Your account is in arrears. The withdraw function is disabled. Click the “Deduct Now” button if sufficient assets are available for the amount in arrears. Alternatively, top up your Spot account balance to proceed.
I have contacted them and they told me that dogecoin had withdrawn from my account. To enable withdrawal I have to deposit those dogecoin. But the account is not mine and the price of those dogecoin is too much. Now I have no way to recover those funds. In this way, How to solve my issue. Any suggestions?”
In practice, Binance service failure led to double-spend of the DOGES that they’re demanding that the user of their platform pay for.
“They explain this by the fact that due to the fact that they duplicated the transaction, which was carried out by me at the beginning of 2020, I must return this amount now.” He added that,
“What is obvious is that the exchange tries to lower their losses by imposing sanctions on the user, even if the mistake comes from their end.”
Issues like this may be responsible for the many scam allegations against Binance Africa which may end up locking up the funds of the user or even shutting them out. For example, in the case of the DOGE withdrawal, if the customer made another deposit to their account, Binance would likely have such funds confiscated until they have recouped the $80,000 loss due to the double-spend that occurred due to no fault of the user.
It is enough, I am a victim. My account has been frozen for about 4 months now with over $500k, mostly comprises of alts coins. Is it a crime to be an African? @cz_binance @binance #binancestopscamming #binancestopscamming
— Brown-Mi (@Mickey_Mickson) January 26, 2022
Binance Blames Users for Avoidable Mistakes
There were several cases where Binance sent funds to the wrong address through their customer’s account. When this happens, they insist that the customer top up and repay the sent funds. A casino support team wrote:
“Last Night, Another Player Knocked me On Support And asked me if this address belongs to us or not D8i9nFHCJ1rKjd4yASXAKNdNpgbKbX2E32
Because Unfortunately Binance Team sent 42124 Doge to this wallet by mistake and they disabled withdrawal for this user and asked for a Top-up of this amount to his Binance account to unlock his withdrawal option.”
The fact that @binance can close a Nigerian account with no reasonable excuse but can’t do same to someone living UK, US or Canada shows how shady they can be.
— Kelvin Chidubem 🇳🇬🇬🇧 (@Sir_Dubem) January 26, 2022
The summary of the whole issue is that the Binance system and staff may be overwhelmed since the number of customers that manage may be more than their capacity. It may also be that they have not put proper risk management features in their operating system to ensure that oversights such as these are avoided.
However, why there are many scam accusations against Binance could just be that the exchange isn’t taking responsibility for the shortfalls in their services.