Traders Predict Binance Insolvent After No 3Commas Refund – Crypto Crash Incoming?
After a Twitter user complained that Binance and CEO Changpeng “CZ” Zhao had done nothing to help them recover monies they believed were stolen from their account, Binance terminated the user’s account. The client has three days to make a withdrawal request.
A Twitter user known as CoinMamba trades futures and invests in cryptocurrency. The individual began tweeting about Binance on Tuesday after alleging that they had lost money in their Binance account when an API key associated with the cryptocurrency trading site 3Commas was compromised.
Masterfully dodged losing any funds with FTX, but still got rugged on Binance. I guess some things are unavoidable..— CoinMamba (@coinmamba) December 9, 2022
Background Story – What Happened?
Users of FTX, Binance, and Coinbase, who thought they were signing up for third-party trading bots like 3Commas, fell for a phishing scam in which their exchange API identities were stolen and used to steal money from their accounts.
3commas provides automated trading solutions, including trading bots. Those may be linked straight to the client’s trading account on the exchange, allowing the app to make trades automatically. Binance and Coinbase (previously FTX) are two of the exchanges they collaborate with.
Scammers were posing as 3Commas employees and were suspected of using fake websites designed to look like the service’s front end to trick users into revealing personal information during registration.
Back then, Binance CEO Changpeng Zhao requested traders to remove their API keys to prevent further attacks by third-party platforms.
We seen at least 3 cases of users who shared their API key with 3rd party platforms (Skyrex and 3commas), and seen unexpected trading on their accounts. If you used such a platform before, I highly recommend you to delete your API keys just to be safe. 🙏— CZ 🔶 Binance (@cz_binance) November 14, 2022
Third-party trading applications can be given permission to access user accounts with the help of API keys. Third-party quantitative trading bots drained the account of a Chinese user on October 21, stealing millions worth of Bitcoin, Ethereum, and FTT.
Although 3Commas claimed there was no API key leak coming from the quantitative robot’s end, they did not rule out the possibility of a breach coming from another source.
Traders Predict Binance Insolvent After No 3Commas Refund
According to the user, Binance wasn’t very helpful in retrieving the lost funds. Whereas, Binance alleges the user “made threats” to their support staff, which resulted in the account suspension.
Mamba, there is almost no way for us to be sure users didn’t steal their own API keys. The trades were done using API keys you created. Otherwise we will just be paying for users to lose their API keys. Hope you understand.— CZ 🔶 Binance (@cz_binance) December 9, 2022
CZ responded to CoinMamba on Friday by claiming, “there is almost no way for us to be confident users didn’t steal their own API keys.”
After being a customer of Binance for 5 years, promoting it heavily and paying over 7 figures in fees, CZ just implied that I stole my own API keys. Whatever man.. https://t.co/22fTt9IB1m— CoinMamba (@coinmamba) December 9, 2022
A series of tweets from CoinMamba followed, in which the account claimed that “all of these exchanges are sketchy” and accused CZ of being “greedy.” CZ responded to CoinMamba by saying that, due to the latter’s “unreasonable” behavior, CZ was considering restricting CoinMamba’s account to withdrawals only.
Your account was placed into withdrawal only mode. The decision was in response to threats you made to our CS, not related to our Twitter dialogue. We pulled together a team of over 20 case agents to try and help you. We are sorry it has come to this, but wish you all the best. pic.twitter.com/lTkKy2WnJS— Binance Customer Support (@BinanceHelpDesk) December 9, 2022
About an hour later, Binance, the largest cryptocurrency exchange in terms of trading volume, closed CoinMamba’s account in reaction to threats he allegedly made to customer support representatives.
Binance’s Twitter account responded to CoinMamba:.
“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.”
Yeap, @cz_binance just closed my Binance account because of my tweets. Not sure what to say. This is unacceptable and I’m sure most of you will agree with me on this..— CoinMamba (@coinmamba) December 9, 2022
Following the scenario, users are now criticizing Biancne for causing an unprecedented chain of events by terminating the accounts of anyone who criticizes them.
I also think Binance is at risk of being insolvent.— ImNotTheWolf (@ImNotTheWolf) December 9, 2022
Specifically because SBF called them out in his unofficial interview. He stated they did the same stuff he was doing, but the reason they won is due to having a higher balance sheet. https://t.co/jLupGcMDoa
Wolf, a Twitter user, shared a tweet expressing concern that Binance is acting similarly to FTX and may be in danger of going bankrupt due to their inability to compensate 3comms victims.
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