A disgruntled user of popular cryptocurrency exchange Binance has taken to the company’s official subreddit to vent his or her frustration over forced identity verification on the platform.
According to the post on r/Binance, the digital currency exchange has suspended all withdrawals from the user’s account without prior notice. Furthermore, the only justification provided by the company so far has been vague and security-related.
Given that the identity verification on a cryptocurrency exchange has always been a controversial topic, it comes across as no surprise that the post gained a fair amount of traction relative to other support threads on Binance’s subreddit.
Binance Customer Support Responds
The support representative further said that a complaint on social media would not overrule the exchange’s decision to request personal identification from the user.
The user in question finally gave in when they realized that they had accepted Binance’s terms while setting up their account. However, other users supported their stand for anonymity while proclaiming that Binance should not have the ability to randomly demand personal information from users that clearly wished to not divulge any information to the exchange.
Legally, however, Binance’s terms are in place to protect themselves against any forms of financial fraud or crime that the user might engage in. Even though Binance is based in Malta, international crime-fighting agencies may request information on suspicious users — which the company has to comply with.
Binance and Identity Verification
Hours after the original response, another Binance employee responded to the thread and stated that there could be various reasons why an account triggers risk management processes. Addressing the user’s account directly, the company representative said that it was not a false positive but, in fact, suspicious activity from the user that forced action.
Furthermore, the employee pointed out that Binance’s terms only allow one account to be created per user. It is likely that some users created multiple anonymous accounts to circumvent Binance’s requirements for identity verification — which, in turn, triggered the risk management system. While verified accounts are allowed to withdraw up to 100 BTC every 24 hours, anonymous accounts have a significantly smaller limit of two bitcoins.
Do you think Binance had no right to freeze this user’s account and demand identity verification? Let us know your thoughts in the comments below!