Binance blocked one user's account after the user claimed on Twitter that the exchange and its CEO, Changpeng "CZ" Zhao, had done nothing to assist them in retrieving funds they believed had been stolen from their accounts.
The Twitter user CoinMamba engages in bitcoin futures trading and investment. On Tuesday, the user began tweeting about Binance, claiming that funds had been stolen from their account after an API key belonging to the cryptocurrency trading platform 3Commas was hijacked.
What is the Matter About?
Customers of FTX, Binance and Coinbase suffered (1) from a phishing attack wherein their exchange API identities were hijacked and exploited to steal cash from their accounts. The victims believed they were subscribing to third-party trading bots like 3Commas.
Trading bots are only one of the automated trading solutions offered by 3commas. This can be done by connecting the app to the client's brokerage account on the exchange. They work with many different exchanges, including Binance and Coinbase.
It has come to light that fraudsters posing as 3Commas personnel have been employing phishing websites that seem identical to the service's front end to get users to give sensitive information during the signup process.
To avoid further assaults by third-party platforms, Binance CEO Changpeng Zhao asked traders to delete their API keys.
The API key is a method by which a user can grant access to a third-party trading program to view their account information. On October 21st, tens of millions of Bitcoin, Ethereum, and FTT were stolen from the account of a Chinese user by automated quantitative trading bots.
While 3Commas has said the quantitative robot caused no API key leak, they have not ruled out the likelihood of a compromise from another source.
War of Words
The user claims Binance was unhelpful while recovering the missing cash. But Binance claims the user "made threats" to their support team, so they had to suspend the account.
When asked by CoinMamba on Friday, CZ replied, "there is almost no way for us to be sure users didn't steal their own API keys."
After that, CoinMamba tweeted that "all of these exchanges are dodgy" and that CZ was "greedy." In response to CoinMamba's "unreasonable" behavior, CZ warned that the latter's account might be limited to withdrawals exclusively.
About an hour later, the largest crypto exchange by trading volume, Binance, suspended CoinMamba's account due to the threats he reportedly made to support staff.
Twitter user CoinMamba received this response from Binance:
“You have doubled down, refusing to file a police report and instead attempting to blame us, demanding compensation. You have even gone as far as to make threats, which we will not tolerate.”
The scenario has led to user criticism of Biancne for starting a never-before-seen chain reaction by banning people who voice criticism.