Due to requests from law enforcement agencies, crypto exchange Binance has frozen account access for a Tezos staking reward auditor named Baking Bad. This corporate account held $1 million (roughly Rs. 8 crore) in Bitcoin, Ether, Polygon and Tether. Baking Bad, in a thread of tweets, claimed that Binance had not shared any information before the crypto exchange decided to restrict access to Baking Bad’s account. For now, it’s also unclear which law enforcement agency ordered Binance to take action. According to Baking Bad’s LinkedIn page, the organization claims to be based in Estonia.
In a Twitter conversation with Baking Bad, Binance claimed the organization was aware of the request from law enforcement.
Binance was responding to Baking Bad on a Twitter thread that claimed his account had been sealed without explanation since July 1 and his balance of more than $1 million (roughly Rs 8 crore) had been set to zero.
Our corporate @binance The account has been blocked since July 1 without any explanation. Today all our balances are set to zero (over $1M). We have all the materials to start an investigation and inform the community, but for now just stay away from Binance and @cz_binance #SAFU pic.twitter.com/PpZSBhYpZS
— Baking Bad (@TezosBakingBad) 25 August 2022
The crypto sector, which usually prides itself on giving its community members the freedom to access their deposits anytime and anywhere, is seeing many cases where exchanges have frozen accounts and undermined the sense of freedom they have given their customers.
In April, the exchange restricted the accounts of Russian citizens and residents so that they could not deposit or trade using Binance during Russia’s war with Ukraine.
Not just Binance, other crypto-related companies have also come under the limelight for restricting account access for users.
After Celsius’ lawyers recently claimed that account holders in custody lost ownership of their assets, these users joined forces against the crypto lending firm to recover a combined $180 million (roughly Rs. 1,415 crore).
Celsius filed for bankruptcy in August. The company is trying to retain the funds of custody users who use Celsius for storage, without putting their money to work.
It is unclear as of now how Binance and Baking Bad will handle the situation going forward.
Given these back-to-back incidents of accounts being frozen by exchanges, industry experts have advised members of the crypto community to use self-custodial wallet services or hardware crypto wallets.