Get the weekly summary of crypto market analysis, news, and forecasts! This Week’s Summary The crypto market ends the week at a total market capitalization of $2,17 trillion. Bitcoin continues to trade at around $62,300. Ethereum experiences no changes and stagnates at around $2,400. XRP is down by 2%, Solana by 1%, and Dogecoin by 3%. Almost all altcoins are trading in the red, with very few exceptions. The DeFi sector decreased the total value of protocols (TVL) to around…
Why Do Exchanges Freeze User’s Crypto Funds?
10.8 k views
Try to picture this: you’ve finally mustered the courage to plunge into crypto. Everything is going right for you. You’re mastering the hacks to optimize your investment and are looking forward to a fulfilling experience within the space. Then it happens. You log in to your account and find that you can’t access it anymore, let alone transact in it. In a panic, you try customer support to no avail. Next, you can’t help asking how you got here. Is it something you did? Will the situation resolve amicably? How long will it take to do so? It’s not a far-fetched reality to find your exchange suspending your account. So, why does that happen? Are there any cases of such suspensions?
Also, what can you do to fix the situation if it affects you? This article outlines the reasons why an exchange will freeze your crypto funds. It also details how you can go about resolving the issue. So, without much ado, I think we should be able to jump in then.
5 Reasons Why Your Crypto Exchange Froze Your Funds
Your exchange could provide several reasons to block access to your account. Here we look at the five reasons why crypto exchanges freeze user accounts.
1. They’ve Noticed Suspicious Activity From Your End
Your exchange will freeze your account if they notice suspicious activity. While trying to curb crypto crime, exchanges have installed tools to detect crypto funds linked to illicit activity. CipherTrace’s tech tool, for instance, enables exchanges to flag potentially risky transactions. Again, it can determine if transactions involve a prohibited region or entity.
Similarly, it categorizes suspicious transactions into criminal, gambling, and dark market. Further categories include ransomware and malware. Once the tool flags your account for any of these, your exchange will hold your funds pending validation.
2. You’re Violating the Exchange’s Terms and Conditions
Each exchange has its terms and conditions. By signing up for a platform, you agree to abide by its rules and regulations. Any deviation from them is a violation that could result in account suspension. For instance, many exchanges forbid coin mixing. Engaging in such will lead to freezing your account(s).
3. The Exchange is Under Attack
Although exchanges have advanced their security features, they remain a lucrative hunting ground for cybercriminals. Unscrupulous individuals scour the crypto space looking for vulnerabilities in exchanges. Once they find them, they exploit them.
Several custodial exchanges have fallen prey to hackers who’ve made off with users’ funds. Recently, for example, hackers hit Liquid, a Japanese cryptocurrency exchange, for $ 97 million.
When an attack occurs, exchanges take steps to limit the resulting damage. The first resort is to suspend all transactions. This action gives them a chance to secure the remaining crypto funds. Additionally, it enables them to plug the loopholes that exposed them to the attack(s).
4. The Platform is Experiencing Downtime
Besides blockchain, cryptocurrency exchanges also use internet technology. And sometimes, their systems experience glitches. Most outages result from demand for a platform’s services that outstrips its capabilities.
A bull run provides the perfect scenario for orders to overwhelm an exchange’s capacity. Drawn by the crypto’s bullish run, many investors would want to join in its gains. Unfortunately, the massive volume of orders they place overburdens the system.
Consequently, the project has to come in to forestall a potential crash. So they freeze accounts and transactions for a while to diffuse the pressure. This allows the digital assets exchange to revert to its optimum functioning in time.
5. A Court Injunction is Freezing the Exchange’s Activity
Many jurisdictions are beginning to acknowledge cryptos. As such, they’re increasingly bringing crypto projects under regulation. And at times, regulators get court orders to suspend the activities of an exchange or specific accounts. Not keen to run afoul of the law, these exchanges have no choice but to comply.
A case in point is last year’s freeze of Virgil Capital’s crypto funds. The SEC obtained an injunction suspending the former and its affiliates from accessing their crypto holdings. At the time, the former accused the latter of abetting fraud by one of its directors. It follows that Virgil Capital and its customers would face account suspensions for the duration of the injunction.
Prominent Exchanges That Have Previously Frozen User Accounts
History is replete with exchanges that have suspended user accounts. Here are a few of them:
- Coinbase – the exchange is no stranger to freezing accounts. In December 2020, it attracted the wrath of its customers. Then, many users accused it of freezing their accounts amid a Bitcoin bull run.
- Binance – between late 2020 and mid this year, it froze the accounts of many of its global customers. The dev team didn’t explain the reasoning behind the act. Its May 2020 incident, however, coincided with the plummeting of BTC.
- Index – the Indian exchange suspended user accounts for suspicious activity in January 2021. The said activities had peaked with BTC’s rallying at the time.
- KuCoin – in late 2020 it froze user accounts to deal with a $150 million hack it had suffered.
What Should I Do to Regain My Frozen Account?
Depending on the reason for the suspension, there are several interventions you may take to regain access to your accounts. First, you’ll need to contact customer support to find answers for the suspension. That said, many are unresponsive, and you’d be lucky to get a response from them.
If it was due to an outage, then please don’t worry. The exchange will restore your functions after it sorts out the capacity challenge.
For other causes of suspensions, it might take longer. For breaching the exchange’s terms and conditions, you’d be lucky if they restored your account. It’s worse for accounts that have handled illicit funds. If it turns out that the transactions were illegal, the exchange will seize your crypto funds.
However, if the exchange has wrongfully flagged your account for illegal activity, they’ll require you to validate your particulars. After that, they’ll look into your transactions, and if they clean, they’ll restore your access.
In instances where there’s a court injunction freezing your account, you have two options. The first is to seek an alternative court order restoring your account function. The second is to wait for the court process to run its entire course. Then the court will determine whether or not you’ll regain control of your funds.
Final Thoughts
For a crypto investor, the frustration of a frozen account ranks up there. One moment you’re fully in control of your account and your funds. In the next instance, you can’t perform the simplest of functions. The panic that ensues aside, could you please know the reasons behind the suspension? This article has only picked five of the most frequent ones. It has also identified instances where leading exchanges have withheld users’ funds.
Btc
Bitcoin
$62.547
price
price
0.84959%
price change
Moreover, it has suggested measures to restore control of your account and funds. However, what’s important is that you strive to stick to the platform’s terms and conditions. Also, please make sure that your transactions are always above the board. These simple actions will save you the time and agony of pursuing funds you may never recover.
Previous
Determining the Initial Value of Cryptocurrencies
Next
Binance Exchange is in Turmoil after Payment Services Act Breach
Written by
Adam Robertson
@Adamjr
282 posts
More author posts
Four Reasons Why National Governments Should Hold Bitcoin in their National Reserves
The dawn of cryptos ushered in what we can term as the next step in the evolution of money. Unlike the tradition of fiat currencies, they offer a financial world that lacks a central authority that controls the money-making process. In addition, transaction costs are comparatively cheaper thanks to its peer-to-peer network system. While the positives are in the open for all to see, cryptos' uptake by governments has been, at best, disheartening. This is because they prefer to stick…
4 years ago
Earliest Cryptocurrencies with DeFi-like Characteristics
Decentralized Finance (DeFi) is the center of these crypto transactions. However, DeFi is an innovative niche that many enthusiasts still need to explore fully. Nevertheless, numerous smaller crypto assets with similar characteristics to DeFi tokens already exist. Binance Chain, PancakeSwap, and Uniswap are examples of DeFi platforms that harbor such investments. However, the others operate on their blockchain networks. What are Some DeFi Characteristics DeFi represents an experimental form of finance that does not depend on central intermediaries like banks,…
4 years ago
Which Altcoins Made The News in H1 of 2021
Altcoins are constantly jostling to make a mark in the crypto world. After Bitcoin and Ethereum, the race to be the third cryptocurrency force keeps heating up yearly. Many strong contenders with different use cases promise more than the big two currently offer. As a result, many are making their mark in a big way, for good and not-so-good reasons, as long as they stand out from meme coins that ride the celebrity popularity wave and crash just as fast…
4 years ago
Has El Salvador’s Bitcoin Legal Tender Stance Impacted the Crypto Adoption?
El Salvador is a country in Central America that borders the Pacific Ocean to the north. It also borders Guatemala to the southeast and Honduras to the southwest. It has recently adopted Bitcoin as its legal tender. BTC is now a lawful means of payment in the country. For some time now, many countries have turned their attention to the "future of finance." This act has triggered numerous reactions worldwide. Also, many countries take sides between backing and condemning crypto adoption. Why…
4 years ago
How Profitable is Crypto Yield Farming?
At its core, Yield farming, also known as liquidity harvesting, involves the art of lending cryptocurrency. It provides more lucrative returns than any other cryptocurrency or conventional investment. It's a chance for the bold and risk-averse digital holders to win big. The United States Securities and Exchange Commission (SEC) is considering whether to regulate the process. In lending cryptocurrencies, the owner profits when the coin appreciates. Therefore, yield farming is an incentive that stimulates the adoption and growth of cryptocurrencies. Yield farming…
4 years ago
Which CBDC is Likely to Dominate the Global Financial Markets?
In a volatile crypto market, developers found a way to stabilize trade. The solution comes from the invention of stablecoins, which entered the market in 2014. Stablecoins are digital currencies linked to an asset or a currency. Some of the most popular assets include gold and fiat currencies. The promise of CBDC currencies can lead this evolution to the next step. The US Dollar backs the majority of stablecoins circulating the DeFi ecosystem. Therefore, the value fluctuations of digital currency remain at…
4 years ago
Publish your own article
Guest post article. Guaranteed publishing with just a few clicks
START PUBLISHING ADVERTISE WITH USBrowse categories
Explore trending topics in the crypto community right now.
Bitcoin
SEC Greenlights Multiple Bitcoin ETFs, Signaling Major Leap for Cryptocurrency Markets
The U.S. Securities and Exchange Commission (SEC) has made a landmark decision by approving 11 spot bitcoin exchange-traded funds (ETFs). This move represents a significant moment in the cryptocurrency industry, marking a shift towards greater institutional adoption and accessibility for investors. The approved ETFs include products from major firms such as BlackRock’s iShares Bitcoin Trust, Grayscale Bitcoin Trust, ARK 21Shares Bitcoin ETF, Bitwise Bitcoin ETP Trust, WisdomTree Bitcoin Fund, Fidelity Wise Origin Bitcoin Trust, VanEck Bitcoin Trust, Invesco Galaxy Bitcoin…
Marius Bogdan Dinu 
@bdinu89
@bdinu89
1 year ago 
595 views
Bitcoin Should be Banned in the United States: Charlie Munger
Berkshire Hathaway’s vice chairman, Charlie Munger, called for a ban on cryptocurrency in the United States on Monday, similar to the one in China. In an op-ed published with the Wall Street Journal, Munger argued that Bitcoin isn’t a currency, commodity, or security, but simply a form of gambling “ with a nearly 100% edge for the house. As such, the enactment of a federal law should ban such things from happening. Munger cited the Chinese communist party’s ban on…
2 years ago 1.5 k views
Tesla’s BTC Positions Remained Unchanged in Q4 of 2022
According to a new earning report from automotive manufacturer Tesla, the company did not sell any of its BTC holdings in the fourth quarter of 2022. Amid speculations that the company had traded BTC during the testing bears, CEO Elon Musk revealed it was yet holding on to its BTC stash. Tesla Maintains Holdings After Initial Sell-Off In Q2 of 2022, Tesla opted to sell 75% of all its BTC. The car manufacturer received close to $950M in exchange. Notably,…
2 years ago 1.5 k views
Here’s When Grayscale Debates the SEC in Court on its Bitcoin Spot ETF
The District of Columbia Court of Appeals has marked a date for when Grayscale and the Securities and Exchange Commission (SEC) may present oral arguments regarding the approval of a Bitcoin spot ETF. Each side will present its case at 9:30 am ET on March 7, with the SEC arguing against the product, and Grayscale arguing in favor. Grayscale VS SEC The court date – revealed in a court order filed on Monday according to CNBC – is much earlier…
2 years ago 1.8 k views
Ethereum
Ethereum’s Zhejiang Staking Withdrawal Testnet for Shanghai is Live
At 15:00 UTC on Wednesday, the much-anticipated Zhejiang testnet for staking withdrawal went live on Ethereum’s Beacon chain. Zhejiang will enable the testing of the Ethereum Improvement Proposal (EIP) 4895 which allows for staking withdrawals. This is in preparation for the network’s next major update, the Shanghai hard fork slated to launch sometime in March. Users Can Make Simulated Withdrawals with Zhejiang In a tweet yesterday, DevOps engineer at Ethereum foundation Barnabas Busa gave details about the Zhejiang testnet slated…
2 years ago 1.6 k views
Ethereum Devs Disagree Over Technical Tweak as Shanghai Upgrade Nears
Post-merge Ethereum users have been eagerly awaiting the commencement of the network’s next major upgrade, Shanghai. However, after over 3 months of prep time, it appears the Shanghai rollout isn’t going as smoothly as expected. What Exactly is the Shanghai Upgrade? In September last year, the much-publicized Ethereum Merge also known as the Ethereum 2.0 upgrade went live. Ethereum underwent some significant changes as its consensus mechanism transitioned from proof-of-work to a cost-efficient proof-of-stake system. However, since the Beacon launch…
2 years ago 1.6 k views
FTX Hacker Converts 50k Stolen ETH to BTC
Per a report from blockchain analysis firm Chainalysis, the attacker behind the Nov 11 FTX exploit, is converting the stolen ETH to Bitcoin. There were muted fears the seemingly inexperienced perpetrator could dump all its ETH holdings. On Sunday, the attacker dumped 50k ETH on-chain, with ETH's price dipping by almost 7%. https://twitter.com/chainalysis/status/1594349583416840199?s=20&t=pgvQHeVytI20eKQ1ls9bxw Hacker Moves 50,000 ETH to New Address Over the past week, the perpetrator had been steadily swapping the cryptocurrencies they had carted off for Ether tokens. This…
3 years ago 1.9 k views
Censorship Concerns: 51% of Ethereum Blocks Now OFAC Compliant
According to new data, over half of the blocks on the Ethereum network now reportedly comply with the US Treasury OFAC’s standards. This comes roughly a month after the platform’s monumental merge update. Phasing Out Tornado Cash The Office of Foreign Assets Control is the intelligence and enforcement agency of the US Treasury Department. Indeed, the OFAC administers and enforces US financial sanctions. A prime example of this is the recent, highly-publicized ban on crypto mixer Tornado Cash. According to…
3 years ago 1.8 k views
Trading
How to Leverage Arbitrage Opportunities in Crypto Markets
Cryptocurrency arbitrage has become an increasingly popular investment strategy as the crypto market grows and evolves. Arbitrage involves taking advantage of pricing discrepancies between markets or exchanges to profit. Investors can leverage profit opportunities by understanding cryptocurrency arbitrage while managing associated risks. In this guide, we'll explore cryptocurrency arbitrage and how it works. A Bitcoin-related example will help us illustrate the concepts of this strategy. What is Arbitrage and How Does it Work in Crypto Markets Crypto arbitrage trading is…
2 years ago 3 k views
The Different Types of Copy Trading in Crypto
Are you interested in trading cryptocurrencies but feel intimidated by the complexity of the process? Copy trading is a great way to get into crypto without needing to be an experienced trader. With copy trading, investors can benefit from the experience and knowledge of more experienced traders, allowing even beginners to succeed. How does copy trading work, and which tips do you need to know to succeed? In this article, we'll explore all aspects of copy trading in crypto. What…
2 years ago 1.7 k views
How to Spot an Unsafe Crypto Exchange
Cryptocurrency exchanges have become increasingly popular as they provide a platform for people to buy and sell digital assets. Unfortunately, not all crypto exchanges are safe or reliable. With the rise of cybercrime and fraud, you must learn to spot an unsafe crypto exchange before investing your money. This guide will help beginners identify and avoid potential risks when selecting a cryptocurrency exchange. The Role of Crypto Exchanges on the Digital Assets Market Cryptocurrency exchanges play a crucial role in…
2 years ago 2.2 k views
What Is Grid Trading in Crypto?
Crypto grid trading has become a popular strategy because of its ability to help traders capitalize on market volatility. Grid trading means you can produce consistent profits by taking advantage of price differences in different markets or time frames. By establishing buy and sell orders at predetermined intervals, you can take advantage of these fluctuations in an automated way. This guide will explore the different aspects of grid trading and provide an overview of its benefits, challenges, and more. Through…
2 years ago 1.6 k views
Tech
Introducing una Messenger: A Paradigm Shift in Blockchain Connectivity
The digital landscape is set for an unprecedented transformation with the introduction of una Messenger, the latest innovation from web3 development powerhouse Wemade. This platform represents an evolution of the "PAPYRUS Messenger," serving as the cornerstone of the ambitious "unagi" initiative, aimed at catalyzing the mass adoption of blockchain technology. The "Unbound Networking & Accelerating Growth Initiative" seeks to bridge the divides between diverse blockchain services and networks, heralding a new era of interconnectedness. A New Frontier in Blockchain Communication…
Marius Bogdan Dinu
@bdinu89
@bdinu89
1 year ago 573 views
Bit2Me Champions WEMIX Token in Pioneering European Listing
Bit2Me, Spain's premier virtual asset exchange, has recently broadened the horizons for cryptocurrency enthusiasts by listing WEMIX, the cornerstone token of the WEMIX3.0 blockchain ecosystem. This marks a notable achievement as WEMIX's inaugural venture into the European market, emphasizing the token's role in facilitating a range of blockchain-based activities, from gaming transactions to decentralized finance (DeFi) applications. Launched with the intention to democratize access to WEMIX for the 450 million Spanish speakers around the globe, this strategic move aligns with…
Marius Bogdan Dinu
@bdinu89
@bdinu89
1 year ago 403 views
CryptoVirally Expands with Fresh Crypto Marketing Offers and Cointelegraph Upgrades
In an exciting update for the cryptocurrency marketing landscape, CryptoVirally has announced a series of new entries and enhancements to its already comprehensive range of services. These updates, aimed at providing tailored marketing solutions for crypto projects, include new limited-time offers and expanded options for Cointelegraph publications. Limited Offers: A Game-Changer in Crypto Marketing CryptoVirally's limited offers section presents an enticing opportunity for crypto projects to leverage high-impact marketing services at discounted rates. These offers, available for a limited period,…
Marius Bogdan Dinu
@bdinu89
@bdinu89
1 year ago 464 views
Breaking Boundaries in Blockchain: WEMIX’s ‘una Wallet’ Sets New Standard for Multi-Chain Asset Management
The WEMIX Foundation has unveiled 'una Wallet,' a revolutionary digital wallet designed to offer unparalleled convenience and security in managing digital assets across various blockchain networks. The announcement, made on January 17, 2024, signifies a new era in the seamless integration of multiple blockchain protocols, including Arbitrum, Avalanche, BNB Smart Chain, Ethereum, Kroma, Optimism, Polygon, and WEMIX3.0. 'una Wallet' is more than just a digital wallet; it represents the culmination of WEMIX's innovative efforts in the blockchain space. It serves…
Marius Bogdan Dinu
@bdinu89
@bdinu89
1 year ago 592 views