Recently Binance froze $1M Tezos tools contributors corporate account. The exchange says it has done this due to a law enforcement request, but there are some doubts.
💡 Baking Bad is a platform “to check your staking rewards and find the most complete list of Tezos delegation services”. Btw baking is staking in the Tezos network.
Tezos staking rewards auditor Baking Bad claims that Binance blocked the account almost two months ago and about a week ago zeroed out the balance which was more than $1M. Binance responded that it was done due to a law enforcement request and that Tezos was informed about it multiple times and was provided with an LE contact form.
According to Tezos they have sent many requests from this form and never received any responses. That’s why they believe that the situation has nothing to do with law enforcement and the decision was made solely by Binance.
Binance also added that the exchange “is required to cooperate with such requests, the same as any other exchange” and that the seizure can be contested only with the agency, and Binance has no impact on this process.
Looking at the tweets in the thread we can say that the community mostly supports Baking Bad and accuses Binance of stealing money, although there are differing opinions.
Binance Customer Support offered help but according to Baking Bad they have not really assisted:
Binance has never mentioned which law enforcement agency it refers to. The exchange operates all around the globe, so the request could have been made by various agencies. Banking Bad LinkedIn page says the company is based in Tallinn Estonia, but in one of their tweets Baking Bad addressed the US Department of Justice.
At the same time it’s worth mentioning that the project team consists mostly of Russians living all around the globe.
Up until now we do not know who is right and who is wrong. Unless the LE request is disclosed, Baking Bad has grounds to accuse Binance of stealing money. Taking into account the support from the community it seems that Binance will have to react somehow to these accusations. At the same time, we should mention that Baking Bad hasn’t brought up the issue since August 25. Either the problem has been resolved (most likely that would have been announced on Twitter), or Baking Bad knows indeed what is the real reason for blocking its account and doesn’t want to disclose it.
Even if there was a real LE request, even if Baking Bad has done something wrong, there is a strong feeling that politics is slowly entering the crypto world, specially when it comes to exchanges. We have observed it before here, here and here.
