Binance User Receives Frozen BTC After DIscontinuing Coinjoin Use

  • A Binance user had his BTC returned after being initially frozen over a dispute involving the use of Coinjoin.
  • Binance Singapore contends that anonymity filters such as Coinjoin cannot be used on withdrawals according to their compliance guidelines. 

A Binance client employing the privacy tool Coinjoin had their BTC returned after originally being frozen by the crypto exchange. 

On Thursday, Binance user Catxolotl took to Twitter to warn other Coinjoin users that the crypto exchange had frozen their funds for employing the privacy tool while attempting to withdraw bitcoin to a Wasabi wallet. 

Coinjoin adds an extra layer of anonymity to bitcoin transactions by grouping and  “mixing” unspent transaction outputs and obscuring the exact nature of sends and receives. Changpeng Zhao, CEO of Binance, replied to Catxolotl’s tweet, explaining that Binance Singapore operates under regulations that prohibit the use of tools like Coinjoin, 

Catxolotl pushed back on the response, condemning Binance for not further explaining the regulation or providing a warning. The social media user said that he understand Binance was just following rules and wasn't "blaming ALL the blame on you or even Binance Singapore, you guys were just playing the game." He added, however, he is disappointed "as one of the big exchanges you guys didn't do anything before."

Catxolotl later updated the Twitter chain confirming that they had received their frozen funds after promising to no longer use Coinjoin. 

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