As a result, the Binance platform was criticized for stopping withdrawals of bitcoin for the user of the Singapore Binance platform, which it argued that this is part of “risk management”.
The platform notified the user that the withdrawal was stopped because the user made some cryptocurrency withdrawals using the “CoinJoin” mixing service, which is part of the “Wasabi” privacy-focused portfolio.
Among other inquiries that Binance has directed to this user is inquiries about the purpose of withdrawing their funds for this wallet.
Bitcoin blockchain generally appears, so transactions can be tracked easily.
So users resort to using some tools to get more privacy and among these tools and services is CoinJoin service which is basically a way to black out transactions on the chain.
Trading platforms don't like these tools:
Since Binance Singapore prevented a bitcoin withdrawal of its users due to “risk management”, the community echoed the old saying:
"You don't have your keys, you don't have your currencies."
Mr. CZ, CEO of Binance, interacted and tried to mitigate the problem by explaining:
For both KYC and AML procedures, there are specialized service providers who analyze exchanges and regulators.
In reality, banks require information about the sources of funds, proof of address, etc.
In the cryptocurrency world, there are service providers that analyze transactions across the blockchain and assign different degrees of risk to different transactions.
Most regulators require trading platforms to use third-party providers.
According to another post in the Penance blog, “CZ” says:
There is no choice before us and people don't realize it and blame the trading platform.
He also continued by saying:
Users who focus on privacy should use privacy currencies and choose the trading platform wisely as there will be risks and laws associated with both regulated and unregulated platforms.IKO