A Binance Singapore user has hit out at the exchange after they refused to comply with his request to withdraw funds from the platform, because he was sending it to a Wasabi wallet. Binance Singapore’s reasoning in the matter acts as a warning that regulations are beginning to hit home in a very real way, and that users should prepare for such intrusive activity on a regular basis.
Bitcoiners be warned: this is what happens if @BinanceSGD finds you withdrawing to @wasabiwallet
Not surprised that my transactions are tracked, it’s KYC after all
But I’m very concerned that Binance knew I was sending to wasabi, when all I input was a bc1 address, nothing more pic.twitter.com/T6ePjahESY
— Catxolotl (@bittlecat) December 19, 2019
“Periodic Review”
The user, Catxolotl, tried to withdraw the unspecified amount of BTC from his account, but received a message stating “Withdrawal Suspended due to Risk Management”. Upon enquiring as to what this meant, he was told that a “periodic review” of his account had been undertaken and Binance Singapore had some questions about where he was sending his BTC – all with the aim of helping Binance Singapore “enhance the security and maintenance” of his account.
This was followed by Binance Singapore revealing that they recognized the addresses to which Catxolotl was planning to send his BTC as belonging to Wasabi, which utilizes the CoinJoin mixing feature, a service favored by individuals wishing to disguise the movement of their BTC. Catxolotl described himself as being “very concerned” that Binance Singapore were able to ascertain where he was sending the funds just from a ‘bc1’ address.
We’ll Ask the Questions
Binance Singapore followed this with a number of intrusive questions regarding Catxolotl’s intended use of the Wasabi service, as well as asking for his current occupation and average income. Catxolotl replied with the required information, stating that the request for such information was “disappointing”, but that it was “understandable” for a KYC exchange. However, he refused to send over some supporting documents as requested, citing the Binance hack in May as a reason why he didn’t want them holding more information on him.
In response to this, Binance Singapore issued a 72-hour access block, stating that they do not tolerate “any transactions directly and indirectly [connected] with gambling, P2P, and especially darknet/mixer sites.”
The First of Many
Binance’s actions are representative of a move by crypto entities to comply with ever-increasing AML/KYC regulations, although as Catxolotl points out in a further email, which actual regulation they are following in requesting the information they did is not specified.
Catxolotl’s experience should act as a notice that maintaining privacy while using the more ‘established’ infrastructure in the space is going to get harder and harder as regulations get tighter and tighter. Big Brother is watching.
