In the world of cryptocurrencies, exchange accounts play an important role in performing financial transactions and managing digital assets. However, sometimes users encounter unpleasant surprises, such as account blocking.

In this article we will look at one such situation, when an account on one of the most popular cryptocurrency exchanges - Binance was blocked.
For many users, a Binance account ban may seem unfair or unexpected, and it often raises a lot of questions and concerns. In this article, we will look at not only the reasons why an account may be blocked due to interaction with sanctioned addresses, but also what measures can be taken to avoid such situations.
What happened
One of the most common and serious reasons for account suspension on a cryptocurrency exchange such as Binance is interaction with addresses associated with international sanctions.

This is exactly what happened to our client’s account. The client used this account for a long time, made weekly deposits and withdrawals, but at some point his luck ran out.
Warning from Binance about restricting the use of your Binance account.
Sanctions are measures taken by states or international organizations to restrict or prohibit trade and financial transactions with certain countries, organizations or individuals. These sanctions can include blocking of financial assets, freezing of accounts and a ban on interaction with certain addresses and entities, which is what happened with the account on the exchange.
When you interact with sanctioned addresses, it may be detected by a cryptocurrency exchange like Binance through its transaction monitoring and analysis system.
The transaction monitoring and analysis system is a tool with which VASP verifies the legality of funds in user addresses. And this, in turn, is close to what the Risk Score of an address reflects.
It is important to understand that compliance with sanctions is the responsibility of any VASP and is aimed at ensuring safety and compliance with laws. However, for users this may mean loss of access to their funds and serious inconvenience.

Interesting fact: did you hear that in November 2023, the largest exchange Binance began to have serious problems? The exchange was accused of providing its services to sanctioned countries and terrorist organizations:
$899 million was spent through Binance by clients from sanctioned Iran, and another $100 million was spent through the exchange by the Russian drug trafficking site Hydra. Back in 2019, Binance management knew that the exchange was being used to finance the Palestinian Hamas movement, which is recognized as a terrorist movement in the United States. Citizens of sanctioned Cuba and Syria also had access to the exchange.
How Risk Score affects the blocking of funds on the exchange
The Risk Score of cryptocurrency addresses is a numeric metric or rating that is used to assess the degree of risk associated with a specific address on the blockchain.
Risk Score helps analyze and determine how likely an address is to be associated with unwanted or illegal activities such as fraud, terrorist financing, money laundering, involvement with sanctions and interactions with sanctioned addresses, and other illegal activities.
AML Crypto's blockchain analytics and risk score tools for cryptocurrency addresses.
It should be understood that the Risk Score is inherent to cold addresses (a cold address is an address that is generated by the user. If the address was generated by an exchange, it should not be considered cold) rather than to exchanges.

To be as precise as possible, the Risk Score of your account on the exchange is calculated from interactions with the addresses that replenished it and to which you withdraw.
For example, you can be an ideal client who complies with all the Terms of use, but if your account was replenished with the addresses of your friend (for example, he repaid a debt to you), and the friend received funds from a sanctioned exchange, then your account will inevitably be blocked.

This works in reverse as well. So, you cannot withdraw funds to sanctioned addresses. Binance tracks both incoming and outgoing transactions. If you suddenly withdraw funds, with a high probability, Binance will confirm the withdrawal, but in the future you will get your account blocked.
Notification about withdrawal of funds to a suspicious address
What to do if my account on the exchange is blocked
What Binance says about blocking funds:

“On occasion, an account may be frozen that is completely outside of Binance’s control. We ask for your patience and understanding while we work with the external parties who are enacting the block to release your account as quickly as possible.”
Contact Support
After contacting support, you will be provided with instructions on the necessary steps to unblock your account and obtain a refund. In most cases, it will be enough to provide additional information or the necessary supporting documents to unlock your account.

Contact information for exchanges can be found in this article.

However, sometimes situations arise when an account is blocked at the request of law enforcement agencies or due to compliance with the laws of the countries in which the Binance exchange operates. In such cases, resolving the problem may depend on cooperation with the relevant authorities, and Binance support may not be able to help.
Try to conduct your own analysis and understand the reason for the blocking; in cases where you find it difficult to conduct research on your own, contact AML Crypto
If support refuses to provide a reason for the ban, it is important to independently analyze your transactions, try to understand why the account was suspended, and continue to interact with support based on your own findings.
What to do to avoid blocking funds on a cryptocurrency exchange
To avoid having your funds blocked on a cryptocurrency exchange, you should follow basic precautions. Here are some tips to help you maintain access to your digital assets:
Check the list of sanctions.
Before you make any transaction, make sure that the recipient or sender address is not associated with sanctions. Many cryptocurrency exchanges monitor compliance with sanctions and may block accounts associated with such addresses. You can check whether the sanctioned address is in front of you or not using the Btrace tool.

Use reliable addresses.
When making cryptocurrency transactions, pay attention to choosing reliable addresses. Use only addresses that belong to trusted and trusted entities. This applies to both incoming and outgoing addresses. If you are expecting a payment from a third party, ask for their billing address, check that address through the Btrace tool and make a decision.
An example of an address verified via Btrace that has a high Risk Score due to being included in sanctions lists.

Follow the rules (Terms of use) of the exchange.
Review and follow the rules and policies of the cryptocurrency exchange you are trading on. This includes rules on compliance with sanctions, anti-money laundering policies and other provisions.

Contact support.
If you have any questions or doubts regarding any transaction, do not hesitate to contact the exchange support team. They can provide you with the information and advice you need. In some cases, you have a chance to recover funds, but you should not rely on this, try to prevent blocking in advance by checking your addresses.

Use cold storage instead of exchange accounts.
If you have large amounts of cryptocurrency, consider using cold storage methods (such as hardware wallets) to reduce the risks of asset theft. While you store funds on the exchange, these are not your funds. You are only guaranteed that you have the right to own a certain amount, but all funds are in the possession of the exchange, similar to storing funds in a bank.

It is important to remember that cryptocurrencies are assets that require caution and responsibility. Following the rules and precautions will help you avoid funds being blocked and ensure the safety of your digital assets on the cryptocurrency exchange.
Check blockchain address using Btrace
In seconds, determine the risk level of the counterparty’s address, find out the source of his funds and make an informed decision about interacting with him.




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