By Evan Spicer
Director of Cryptocurrency Investigations
Social media gives consumers a place to air their grievances about a company and its products. The word about a flawed company or failed attempts at fund recovery can get out fast — and that can be a good thing for many of us.
However, businesses aren’t too thrilled if they feel complaints are unfair, and sometimes, they retaliate publicly.
Binance Called Out for Tepid Response to Fund Recovery Claim
Risking PR fallout, the world’s largest crypto exchange, Binance, suspended the account of a customer who took to Twitter to complain about the lack of fraud recovery services after their API key linked to crypto trading firm 3Commas was used to make unauthorized trades, as reported by CoinTelegraph.
The customer, who calls himself CoinMamba, claims to have kept an account at Binance for over five years. CoinMamba claims that their key, shared with 3Commas, was leaked, yet 3Commas takes no responsibility and says nothing indicates that they were hacked. As a result, he feels Binance’s scam detection and fund recovery services are flawed.
According to reports, other Binance customers have lost money after sharing information with 3Commas. CoinMamba, frustrated that Binance, said the exchange would not pursue fraud recovery on their behalf or give them a pay back, and denounced the crypto exchange.
Binance instructed CoinMamba to delete their other API keys for security reasons. When asked why they wouldn’t seek fund recovery on behalf of CoinMamba and others, Binance CEO Changpeng Zhao “CZ” for short), responded in a tweet:
“Mamba, there is almost no way for us to be sure that users didn’t steal their own API keys. The trades were done doing the API you created. Otherwise, we will just be paying for users to lose their API keys. Hope you understand.”
CoinMamba didn’t understand, at least not in the way that Changpeng Zhao had hoped. The disgruntled customer tweeted that Binance should “stop being greedy and compensate the users.”
The drama continued. CZ wrote in a now-deleted tweet that he was considering putting CoinMamba’s account in withdrawal-only mode and that it won’t worthwhile for the crypto exchange to “service people who are unreasonable.” In addition, Binance claimed CoinMamba had threatened customer service staff.
Was CoinMamba “Unreasonable” for Expecting Fund Recovery from Binance?
Should Binance customers expect fund recovery from crypto scams? It’s apparent that, according to customers such as CoinMamba, Binance either feels it can’t or doesn’t want to handle all fraud recovery complaints.
It could be posited that since CoinMamba took to Twitter rather than keeping his complaints private, he might have forced the issue and Binance rebuffed his claims to make an example out of CoinMamba.
Binance does have a procedure for scam detection and reporting a crypto scam. However, the exchange still urges customers to contact law enforcement and authorities. It is often outside agencies, rather than Binance itself, that are successful with crypto recovery.
CoinMamba isn’t alone – other crypto scam victims have found little fund recovery help from exchanges. That doesn’t mean that crypto recovery isn’t possible on Binance, it’s just that most successful claims and pay backs from crypto scams have involved outside assistance.
Shouldn’t Binance be responsible for losses on its exchange? Shouldn’t it freeze accounts of suspected crypto scams? Should Binance be more proactive with scam detection and fund recovery pay backs? We have to keep in mind that one of the things that attract people to cryptocurrency – the lack of regulation – makes it risky as well.
In the United States and Europe, rules have been proposed that would regulate cryptocurrencies and crypto exchanges similar to the way banks and other financial companies are regulated.
Whether or not these new rules will make scam detection and fund recovery easier remains to be seen. In the meantime, MyChargeBack professionals will provide you with the guidance, tools and advanced crypto investigation reports that will bolster your claim and help you on the road toward successful crypto recovery.
Need a Fund Recovery Pay Back from a Crypto Scam? Talk to MyChargeBack Professionals Today
If you have lost money to financial fraud, talk to the MyChargeBack team. Our investigations will provide evidence to bolster your claim. Our crypto investigation reports are essential for tracking down your funds on the blockchain and getting your started on the road to fund recovery.