Binance accused of alleged embezzlement of $860K by Ukrainian national

Binance, the world’s leading crypto exchange by volume, has recently come under fire in the press for allegedly seizing the accounts of a Ukrainian national and refusing to reinstate any of his holdings for the past eighteen months. The news comes as a bit of a surprise for the crypto industry’s leading exchange and bastion of integrity. Reports typically cover the continued expansion of its global footprint, or, on a different note, its acquisition of for a guesstimated $400 million.

This story begins back in November of 2018. At that time, the owner of the account in dispute, who has been called “B.K.”, claims that Binance seized his account, amounting to nearly $860,000, comprised of close to a dozen different coin offerings. Binance has responded to news articles authored by HackControl, a cyber intelligence firm, and ForkLog, a Russian-based crypto news site, by explaining that they had only followed instructions from South Korean Police officials, who alleged that the owner had been involved in a crypto fraud scheme involving 2,844 Ether (ETC).

Per a Binance spokesperson’s comments to CoinTelegraph:

We have a standard procedure where once an account is flagged by a law enforcement agency, we will freeze an account and turn it over to them in accordance with the law and cooperate in investigations while also being careful to prevent any tip-offs. After we performed all necessary due diligence steps internally, Binance complied with the request from Korean law enforcement and completed the return of funds.

Binance seeks to curb SEC’s hunt for “fraud”

Copies of South Korean correspondence were also shared with Ukrainian Police officials, when they investigated the owner’s complaint in April of 2019. According to reports from the Bitcoinist:

The company explained the incident and was told that no further assistance was needed, suggesting that the agency was satisfied with the explanation.”

The owner of the account, however, was anything but satisfied. He has gone on the offensive with press articles that purport that Binance employees embezzled substantially more than the funds in question for their own special purposes. There are also discrepancies in account details, which raise more questions. The user told reporters from ForkLog that:

I have every reason to believe that Binance misappropriated my money for itself. Communication with them continues from November 21, 2018. It has been 18 months already.

Binance has advised the owner to take up his issues with the South Korean Police. Unfortunately, the owner claims that the authorities had never told him of any fraud issues involving him, nor have they acknowledged any of the correspondences with Binance, which supports their case. Investigators with HackControl also contend that they have other account owners with similar problems, who are prepared to file a class action lawsuit for $3 million. Binance denies any wrongdoing and warned that it would take legal action to protect its reputation from any misrepresentation or misinformation.

It is a sad state of affairs that our most successful corporations, by their success alone, often become targets of spurious lawsuits. In this case, we are still in the “he said, they said” phase of the disagreement. There may certainly be more details forthcoming from both sides of this skirmish, but in the meantime, Binance will continue to expand its presence in Asia, build volume, and generate profits for its owners. It has already been acknowledged as the largest holder of BTC positions on the planet, a statistic that can only drive more volume to its burgeoning empire.

Read Also: