Binance overreaching: Demanding $12.5k for a $5k deposit & policing external wal

[NotATether]

   The Overreach: Binance claims they received reports about "fraudulent activity" on external, non-Binance wallets that interacted with the funds before they reached my account. They are acting as a global judge and jury for transactions that occurred on-chain, outside of their jurisdiction.

That must be a nightmare to deal with. In these cases they should have to show you the full transaction graph to prove their claims and mark the fraud addresses. But since yours source has already proved (I guess) is legitimate, I don't see why they should have to trouble you over this let alone asking you for more money.

I guess you need to find someone with big following to make some noise about it on social media for them to pay attention to this.

[rat03gopoh]

Binance now has a lot of enemies (most recently with the Financial Times). I think they'll be more aggressive in cracking down on "suspicious" accounts based on their internal intelligence tools without waiting for authorities to issue orders, just to prove they're stricter than before. Furthermore, users will have to contact authorities themselves to prove Binance suspects the wrong person.

Binance's "revenge" efforts are apparently more troublesome.

[robelneo]

I am not hiding anything. I am exposing a system where a CEX ignores the Presumption of Innocence and tries to force users into illegal "settlements" to avoid the standard legal process involving actual law enforcement.

We do not have a Binance representative here. Did you make them aware of your scam accusation here in Bitcointalk? We never know if they send one to address this issue. So far, this is your version, and it looks good and valid, but we do not know Binance's version.
Exchanges like Casinos have sophisticated tracking tools; they don't just randomly accuse a guy; they have a security department to make sure all transactions are legal.
They ask you to let the police intervene, so if they are legally required to respond to this accusation, they can present their evidence to the appropriate authority.
If you decide to take the case further, I wish you luck. You have to fight for it if you think they harmed you.

[Asurinda]

   The Overreach: Binance claims they received reports about "fraudulent activity" on external, non-Binance wallets that interacted with the funds before they reached my account. They are acting as a global judge and jury for transactions that occurred on-chain, outside of their jurisdiction.

That must be a nightmare to deal with. In these cases they should have to show you the full transaction graph to prove their claims and mark the fraud addresses. But since yours source has already proved (I guess) is legitimate, I don't see why they should have to trouble you over this let alone asking you for more money.

I guess you need to find someone with big following to make some noise about it on social media for them to pay attention to this.

Exactly. In any legitimate compliance process, the burden of proof lies with the institution. If they claim the funds are linked to fraud, they should provide the official Case Number from law enforcement and show the blockchain analysis that justifies the freeze.

Instead, they are doing the opposite:

    They refuse to provide any legal documentation or warrant.

    They are "negotiating" the release price ($12.5k down to $5k).

    They are demanding a transfer to a third-party wallet outside their ecosystem.

This isn't "compliance" — it's a black box. As for the social media noise, I've already started. I've tagged key industry investigators and reached out to major crypto news outlets. A regulated exchange cannot be allowed to act as a private court, ignoring the Presumption of Innocence and the VASP (Virtual Asset Service Provider) regulations.

If they can do this to me with a $5k deposit today, they can do it to anyone tomorrow. That is the dangerous precedent we must stop

[Asurinda]

Binance now has a lot of enemies (most recently with the Financial Times). I think they'll be more aggressive in cracking down on "suspicious" accounts based on their internal intelligence tools without waiting for authorities to issue orders, just to prove they're stricter than before. Furthermore, users will have to contact authorities themselves to prove Binance suspects the wrong person.

Binance's "revenge" efforts are apparently more troublesome.

You’ve hit on a very disturbing trend. Binance is trying to overcompensate for its past regulatory failures by acting like a "hyper-policeman." But there is a massive legal difference between being "strict" and being "lawless."

1   The "Guilty until proven innocent" trap: If Binance suspects someone, they have the right to freeze funds and report it to the authorities. They do NOT have the right to act as a private court and demand "refunds" to external wallets. Compliance is about following the law, not making up your own rules to please regulators at the expense of users' property rights.

2   Jurisdictional Chaos: If I have to go to the authorities to prove Binance is wrong, which authorities should I go to? Binance is a global entity with a "shifting" headquarters. This is exactly why the VASP (Virtual Asset Service Provider) framework exists — to prevent exchanges from creating these unreachable "legal loops."

3   Market Abuse: By "negotiating" the amount ($12.5k vs $5k), they prove this isn't about internal intelligence or strict compliance. Real compliance is binary: either it's fraud or it isn't. You don't get a "50% discount" on fraud.

Binance's "revenge" against its bad reputation shouldn't be paid for out of the pockets of its users. If they want to prove they are clean, they should start by following the Presumption of Innocence, which is a cornerstone of the very legal systems they are trying to impress.

[Asurinda]

I am not hiding anything. I am exposing a system where a CEX ignores the Presumption of Innocence and tries to force users into illegal "settlements" to avoid the standard legal process involving actual law enforcement.

We do not have a Binance representative here. Did you make them aware of your scam accusation here in Bitcointalk? We never know if they send one to address this issue. So far, this is your version, and it looks good and valid, but we do not know Binance's version.
Exchanges like Casinos have sophisticated tracking tools; they don't just randomly accuse a guy; they have a security department to make sure all transactions are legal.
They ask you to let the police intervene, so if they are legally required to respond to this accusation, they can present their evidence to the appropriate authority.
If you decide to take the case further, I wish you luck. You have to fight for it if you think they harmed you.

I agree that hearing both sides is essential for a fair judgment. I have already tagged Binance’s official handles on X (Twitter) and invited them to this thread. The fact that they remain silent here while continuing to use scripted ultimatums in private chat speaks volumes.

However, let’s address the "Sophisticated Tools" and "Casino" logic:

1   Tools are not Laws: Even the most sophisticated tracking tool is not a Search Warrant. A tool can flag a transaction for investigation, but it does not give a private company the legal authority to seize property indefinitely without involving law enforcement within the statutory timeframe (usually 30 days under most VASP regulations).

2   The "Casino" Fallacy: If a casino suspects you of cheating, they call the police. They don't lock you in a room and say: "We think you stole $12,500, but if you record a video and pay us $5,000 to this random wallet, we’ll let you go." That’s not security; that’s a hostage situation.

3   The Negotiable "Evidence": You mentioned they have a security department to ensure transactions are legal. If their evidence is so "sophisticated," why did the required "refund" amount change from $12,500 to $5,000 after I pushed back? True evidence doesn't change based on how much the user complains. This "price negotiation" is the clearest proof that they are acting outside of any formal legal process.

4   Police Intervention: I have already contacted the Seychelles FSA. I am not avoiding the law — I am demanding it. If Binance has evidence, they should have presented it to a prosecutor 35 days ago to get a Seizure Order. Telling a user to "go to the police yourself" is a tactic used to shift the burden of proof and exhaust the victim.

I am fighting this because if we allow "sophisticated tools" to replace "Due Process," then no one's funds are safe. I welcome Binance to join this thread and explain why they are demanding manual transfers to external wallets without a single court document.

[ScamViruS]

4   Police Intervention: I have already contacted the Seychelles FSA. I am not avoiding the law — I am demanding it. If Binance has evidence, they should have presented it to a prosecutor 35 days ago to get a Seizure Order. Telling a user to "go to the police yourself" is a tactic used to shift the burden of proof and exhaust the victim.

I am surprised to hear that Binance is doing something like this, there are a lot of complaints about Binance but this is the first time I have heard of something like this. And this is a very shocking incident, they can treat anyone the same if you don't stand up against it. Yes, if you are not doing anything illegal and they are harassing you, then you should file a complaint.

If they have this kind of attitude, then no one's funds are safe with them. Your case will warn many people about Binance, so that they will be more careful.

[Asurinda]

Final Update on the "Negotiation" Phase:

It’s now clear: Binance has no intention of following legal procedures. Their "investigation" has exceeded the standard 30-day window, yet they haven't produced a single official document.

We are beyond a simple misunderstanding. This is a matter of principle. They have moved from being an exchange to acting as a "Digital Dictator" — ignoring the presumption of innocence and attempting to force a private settlement to an external wallet.

When a multi-billion dollar corporation decides to crush an individual user by ignoring the law, the only weapon left is publicity.

I have stopped all "haggling" with their support. If they want to act like they are above the law, they can now explain their "external wallet" policy to the regulators and the public. I am now taking this case to major crypto investigators and influencers.

To the community: If you believe that property rights matter more than the arbitrary "internal intelligence" of a CEX, please help me bring this to light. Silence today is a green light for them to do this to you tomorrow.

[Coyster]

If they have this kind of attitude, then no one's funds are safe with them. Your case will warn many people about Binance, so that they will be more careful.

Funds have never been safe in any centralized exchange, not just even in Binance. Custodial platforms have a history of confiscating customer funds for the flimsiest of reasons and this current case is one of such. The community has been warning people about this for a very long time. If it is a large amount, it is wrong to receive funds straight into a custodial platform, better to receive it in your non-custodial wallet, jump through certain hoops, before sending some of it into the exchange.

Silence today is a green light for them to do this to you tomorrow.

We have not kept silent about this. In this forum we have said it a million times that centralized exchanges can steal your funds at anytime, and not just that, they are also data farms, but there is only so much we can do.

[Shishir99]

Could you please tell us who sent you the $ 5,000? Do you know them? If you received $ 5,000 from a known person, why not ask them about it and have them to deal with Binance? If it is you who received that $5k from a mixer or a gambling website, I don't think they will report it. I see that Binance is requesting you to return the funds to their original source. Now I am curious what the funds came from.

I don't want to play devil's advocate. If you received $ 5,000 as payment for your work, ask them about it. I am more curious about where the deposit came from. I feel like you are the scammer yourself who tricked someone to sending you the $5K. There are hundreds of cases on the internet, and this would be one where the victim would be able to get their funds back. Would you be able to prove me wrong?

[ScamViruS]

If they have this kind of attitude, then no one's funds are safe with them. Your case will warn many people about Binance, so that they will be more careful.

Funds have never been safe in any centralized exchange, not just even in Binance. Custodial platforms have a history of confiscating customer funds for the flimsiest of reasons and this current case is one of such. The community has been warning people about this for a very long time. If it is a large amount, it is wrong to receive funds straight into a custodial platform, better to receive it in your non-custodial wallet, jump through certain hoops, before sending some of it into the exchange.

Yeah. No centralized exchange is safe, they can seize anyone's funds for any reason. Since we are discussing the case of Binance here, and Binance always presents itself as the savior of the crypto industry. But the reality is completely different, they are always waiting to take advantage of the situation. Since a large number of crypto users are still using centralized ones, it is conceivable that there is always a danger waiting for them here. So we have to warn crypto users about these things, and when someone like the OP brings his case here, it comes across as a more effective warning to everyone.

[aioc]

I have stopped all "haggling" with their support. If they want to act like they are above the law, they can now explain their "external wallet" policy to the regulators and the public. I am now taking this case to major crypto investigators and influencers.

So far, all that you've presented here are your facts, but we don't know the real facts, as Binance is not present here to present its own version and investigation.

You made the right decision to take this case to a major crypto investigator or authority, but why include influencers? Do they have the authority to decide on who is right in this case?

I'm not siding with you or Binance, but for a case to be valid, both parties should have their side heard. If you're really clean, I hope you'll get justice. You are David, fighting a Goliath at Binance, so good luck.

[Coyster]

but why include influencers? Do they have the authority to decide on who is right in this case?

They do not. But if you are to stand any chance of getting your money back in situations like this, then you have to make as much noise about your case on social media platforms were the service is represented. Getting influencers to also help in doing this makes a lot of sense because of how far their reach is.

I'm not siding with you or Binance, but for a case to be valid, both parties should have their side heard. If you're really clean, I hope you'll get justice.

Centralized exchanges are infamous for doing this like this. So it is not hard to decide who to believe in cases like this.

[coupable]

Could you please tell us who sent you the $ 5,000? Do you know them? If you received $ 5,000 from a known person, why not ask them about it and have them to deal with Binance? If it is you who received that $5k from a mixer or a gambling website, I don't think they will report it. I see that Binance is requesting you to return the funds to their original source. Now I am curious what the funds came from.

I don't want to play devil's advocate. If you received $ 5,000 as payment for your work, ask them about it. I am more curious about where the deposit came from. I feel like you are the scammer yourself who tricked someone to sending you the $5K. There are hundreds of cases on the internet, and this would be one where the victim would be able to get their funds back. Would you be able to prove me wrong?

Regardless of the situation of OP about the sources of his deposits, Binance is not entitled to take action outside its own ecosystem. In this case, the platform issued a financial penalty like, or something like the ransom. I wished OP asked the support about which exact rule in their TOS he broke and why they froze his deposit at first place. Note that deposits from mixers are automatically flagged but never blocked until paying an insane amount as ransom.

I know about many kinds of disputes especially in the peer to peer market because users are using local payment methods that binance mignt find it hard to verify, but this is the first time I see a case like this.

[Asurinda]

Response to the discussion:

First, I want to thank Coyster and coupable for highlighting the core issue here. It is not about my transaction history—it is about the illegal precedent Binance is trying to set.

To Shishir99: You are asking me to prove my innocence to you or to Binance. That is not how the law works. If Binance has evidence of a crime, they are legally required to report it to law enforcement. It has been 37 days, and they have provided ZERO police case numbers or court orders. Instead of following the law, they are trying to "negotiate" a ransom.

The "Bazaar" Logic:

 >   If I am a "scammer," why did Binance offer to release my funds if I pay them $5,000?

 >   Since when does a global exchange offer a 60% discount on fraud (dropping the demand from $12.5k to $5k)?

  >  Why is the money being sent to a manual external wallet instead of a verified original source through a legal reversal?

As coupable correctly noted, this is a financial penalty acting as a ransom. Binance is acting as the accuser, the judge, and the beneficiary of the funds. This is a total breakdown of VASP regulations.

Update on legal actions: > I am no longer waiting for Binance's "permission" to access my own property. I have officially filed complaints with the following authorities today:

 1  Seychelles FSA (Nest Services Limited's primary regulator).

 2   ADGM FSRA (Abu Dhabi, where Binance holds its latest 2026 license) — Official Case Number: #00356155

 3  Financial Ombudsman.

I have provided all logs, the "negotiation" screenshots, and the demand for external wallet transfers. If Binance believes they are right, they can now explain their "ransomware-style" compliance to the ADGM regulators.

To aioc: I include influencers because a multi-billion dollar corporation only fears one thing: reputational damage. When the law is ignored, the only tool left is the light of the community.

I will keep everyone updated on the response from the regulators.

https://i.ibb.co/0p8LJKV4/i-Screen-Shoter-Thunderbird-260112201832.jpg



URGENT UPDATE: > I have just received a formal update from the ADGM FSRA. My case has been officially assigned to the Enforcement Department for assessment.

This is a major escalation. The Enforcement Department handles serious regulatory breaches, and the fact that they’ve taken Case #00356155 confirms that the evidence of "negotiation" and "external wallet demands" provided is being taken seriously at the highest level.

The clock is ticking even faster for Binance/Nest. I’m no longer just a user with a locked account—this is now a formal regulatory inquiry into their compliance practices.

https://i.ibb.co/zWnNkttC/i-Screen-Shoter-Thunderbird-260112211849.jpg

[Coyster]

The clock is ticking even faster for Binance/Nest. I’m no longer just a user with a locked account—this is now a formal regulatory inquiry into their compliance practices.

It is great that your case has been escalated and assigned to the appropriate department, hopefully this gets resolved in your favor, because this is clearly on overreach by Binance and they should not be allowed to do this with impunity. Too many exchanges have a habit of confiscating people's money and hoping they go silent, so they can keep the money for themselves.

I will keep everyone updated on the response from the regulators.

Yes please do. And good luck with this.