In 2021, Binance customers faced a number of issues in Binance withdrawal of funds. Naturally, a lot of people were frustrated by this including the Dogefather himself, Elon Musk. Going into 2022, you’re probably wondering if something similar might happen again.
It’s not an easy decision considering that Binance is the most popular crypto exchange for many reasons. Nevertheless, we shall give you the lowdown on some of the Binance withdrawal problems on Binance to help you decide for yourself.
One of the main problems Binance users face is the inability to withdraw funds in fiat. Unfortunately, that feature is only currently available to a few countries’ residents listed below:
- United Kingdom
- Republic of Cyprus
- Czech Republic
Another option that may be used is Swift or SEPA. Swift is simply referring to wire transfers and is available in most countries and provided by banks. Meanwhile, Single Euro Payments Area (SEPA) is available in European countries and it allows fast, reliable and affordable transfers of cash in euro (EUR).
If you still can’t make a withdrawal in fiat, you can use Binance P2P. The platform has already grown to be the top P2P exchange in the world thanks to a large number of users. Moreover, Binance P2P accepts over 150 payment methods including PayPal and even cash. Here, you get to set your conditions including price and how you would like to receive fiat. Unlike the main platform, therefore, you will have a lot more flexibility and control.
A year marred by withdrawal problems
The first reported halt to withdrawals was on 10 May. Binance announced on Twitter that all withdrawals had been suspended temporarily. In a text message to Bloomberg, CEO and co-founder Changpeng (CZ) Zhao said that they sometimes do that due to system maintenance reasons.
Indeed, it is not uncommon to experience such disruptions among crypto exchanges. And aside from routine disruptions, many exchanges continue to suffer due to extremely high trade volumes.
However, CoinDesk would publish a scathing report on 12 May about users getting their accounts frozen. While the report didn’t name actual individuals, it stated several unconventional reasons as to why clients couldn’t withdraw their funds.
For example, one user, given the pseudonym Gregory Hitchens, had his Binance US account frozen due to a $20 chargeback which he claims he never made. He agreed to pay the chargeback nonetheless but Binance still insisted on the payment. Eventually, he withdrew his money but only after texting the mother of Binance.US CEO Catherine Coley so he could get his funds unstuck.
Keep in mind, these issues are not only experienced by Binance.US clients; even the primary Binance exchange and Binance Australia also have issues. In most cases, Binance had flagged those accounts for ‘risk management and anti-money laundering (AML). Although CZ declined an interview with Coindesk, he did issue a statement saying, “Accounts flagged for suspicious activity, whether it is an attempted hack or failing audits required by our AML standards, are suspended during pending investigations.”
While this may appear reasonable, customers have been subjected to impossible verification hoops. Take Buffy Summers, for instance. After having an active account on Binance Global for 4 years, her account got frozen when she tried to make a withdrawal. To verify her account, she was asked to upload more than 15 videos showing evidence of her funds’ provenance.
Unfortunately, she wasn’t able to do so since the videos are larger than Binance accepts. Also, it’s not possible to upload PDF files through the chat window yet the customer representatives insisted on proof in PDF format.
She wasn’t the only one either since a lot of users are facing similar problems and they can’t withdraw funds. To see just how common the problem is, simply read the replies to this tweet from Binance.US from 13 May.
For others, the reasons provided by Binance regarding their accounts being frozen are simply ridiculous. In the above image, you can see one case where the funds didn’t reflect on a user’s account simply because she had not included a reference number. In another case, Logan Brown had several thousand dollars worth of BNB coins locked in his Binance.US account for months. The reason provided for this was that he had not filled out the memo field while making the deposit.
The worst part for the victims was that it was nearly impossible to get a hold of a real representative from Binance. Many, like Hitchens, have been forced to directly contact the company officials. Buffy Summers, for example, only made a successful withdrawal after directly messaging the CEO of Binance Australia, Jeff Yew.
The London blackout
Yet another problem with withdrawals on Binance came on 29 June, but this one only affected British users. On that day, the ability to add or remove sterling pounds (GBP) to its main platform using bank cards had been ‘suspended for maintenance.’ As expected, users started tagging CZ in tweets with their complaints but got no reply.
The move came only a day after customers had been locked out of Faster Payments. The latter is a UK payments network owned by Pay.UK that enables faster transactions between banks in the country. A week earlier, the FCA had ordered Binance Markets Ltd. and Binance Group to cease all regulated activities related to derivatives and securities in the country.
Thankfully, the service was quickly restored on 29 June in the afternoon. Complete withdrawal service was finally restored on 2 July. That proved that despite Binance facing increasing regulatory pressure around the world, it wouldn’t stop offering its services as usual.
For nearly 2 hours on 1 November, all crypto withdrawals from Binance were halted. The company made the announcement on Twitter explaining that this was due to a glitch in its database system. Less than 2 hours later, it was announced that withdrawals had been resumed except with delays due to the backlog. Then they again announced withdrawals have been closed, followed by complete resumption of withdrawal services.
Despite the uncertainty of the situation, this instance was perhaps more understandable and the feedback wasn’t too harsh. Remember, as we said earlier, such problems are common in crypto and users tend to understand.
For much of November, Dogecoin holders were unable to make withdrawals on Binance. The issue started several days after the November shutdown during the DOGE wallet upgrade. Binance had listed DOGE all the way back in 2019, at v1.14.0 and was making an upgrade to v1.14.2 and then further to v1.14.5. During the process, 1,634 users were sent old transactions and that led to the problem.
While the previous problem with withdrawals was somewhat understandable, users weren’t happy about this one. For one, it took way longer than anyone had anticipated. The freeze on Dogecoin withdrawals came on 12 November after some users were asked to return DOGE to the exchange.
Secondly, Elon Musk’s tweet fueled the fire against Binance. In a 23 November tweet, Musk replied to CZ’s post saying ‘…sounds shady.’ He also railed against the Binance withdrawal limit. This was after Binance had announced another week extension to the freeze. It ignited a spat between the Tesla CEO and Binance with the former saying that investors should be protected from errors that are not their fault. Given that Musk is the Dogefather you can only imagine the outrage poured at Binance.
Finally, despite Binance stating that they were working with the Dogecoin Developers, the latter revealed that Binance had known about the issue for over a year. In a Twitter thread, the developers said that they had notified Binance about it nearly a year earlier but the exchange made no corrections. Instead, Binance opted to resend the transactions resulting in the error.
This would explain why the withdrawal issue was experienced by Binance users and not other exchanges which were perfectly normal. Binance would later publish a blog post explaining the reason for the freeze but it was too late. Withdrawals were possible again only on 29 November with an apology and insisting nothing shady was going on as Musk had suggested.
Why so many withdrawal problems on Binance?
Compared to other major centralized exchanges, Binance has had more withdrawal problems. One possible reason for this may be due to a large number of users and trading volume on the platform. It is the top exchange by volume and handled more than $94 billion worth of trades over the past 24 hours. It is estimated to have 28.6 million users by Business of Apps and lists over 400 coins according to CoinMarketCap.
Clearly, this is a lot of volume matching and even beating some stock exchanges. And with that much volume, it’s not unlikely that problems will arise especially regarding crypto withdrawals. We believe this is to be expected, though Binance should put more effort into ensuring consistent quality. Because as Elon Musk stated, investors should be protected by the company.
Heightened financial regulation
Another possibility is that Binance is facing increasing scrutiny from financial regulators. While its payment partners are still on board, they may not want to sustain the relationship if it threatens their own position. Should one feel like Binance’s business is threatening their standing with regulators, you can bet they will immediately drop it… no matter how profitable.
For example, responding to the FCA’s order against Binance, Pay.UK released a statement saying it “requires all direct and indirect participants to conduct appropriate due diligence on their customers. Binance has never been a direct or indirect participant of the Faster Payment System and the FCA ruling has not changed this.” Separately, another payments processor Natwest Group in Britain introduced daily limits for users on crypto exchanges including Binance over concerns about fraud.
We have to state that this is speculative since we’re only relying on a few cases and heavily from the affected users’ perspective. That being said, Binance has indicated some slight negligence in its services including withdrawals. During the Dogecoin saga, we learned that the exchange was aware of an error for more than a year yet elected to do nothing. This negligence resulted in Dogecoin investors being frozen out for about 3 weeks.
Then there are the complaints about poor customer service and impossible conditions demanded before one can make a withdrawal. For Binance.US customers, the exchange made it explicit last year that it would strictly enforce regulations. CZ said that the company closely follows American rules and has strong controls to prevent its customers from laundering funds. But the problem extends beyond US clients since users in Australia and the rest of the world are also having withdrawal problems… albeit not as much.
You should also compare Binance’s actions with those of other exchanges. Other US-based exchanges like BitMEX allowed users to withdraw crypto to an external wallet before closing their accounts. Not Binance. Perhaps the company is more focused on growth and innovation while neglecting the improvement of its current services.
Should you expect more issues in 2022?
If you’re a Binance customer considering making a change or a new investor thinking about joining, this is the right question to ask yourself. After all, you don’t want to be holding a coin any longer than you need to. Interestingly, this is what happened on 11 July when Binance froze for over an hour just as the price of Bitcoin and other cryptos was falling. Investors who could have offloaded the plunging coins could only watch as their savings and investment declined.
The problem is that these issues are impossible to predict especially in a highly volatile market like cryptos. What we can say for sure is that, given Binance’s record, it’s bound to keep happening even in 2022. Perhaps the company will put more emphasis on strengthening its systems but all in all, you should always be ready for the next freeze or maintenance shutdown.
The only way to ensure you don’t face any avoidable withdrawal problems is to make sure your account is verified. A complete tutorial on verification can be found on Binance FAQs and we encourage you to follow through on it. Alternatively, watch the YouTube video if you prefer.
This doesn’t necessarily make Binance a terrible exchange. On the contrary, there is a reason why millions of people have chosen it and that’s because it offers excellent services. It has the widest choice of cryptos to trade and even offers innovative tools like futures and margin trading. All these make it the ideal exchange for an active trader or experienced investor.
On the other hand, if you’re looking for long-term investment and would like to ensure that your capital is completely safe, this may not be the best platform for you. Binance has been facing criticism from regulators all over the world, forcing it to take extreme measures. Such measures are the reason so many people have had their accounts frozen and withdrawals failing.
Binance withdrawal FAQs
How long does Binance withdrawal take?
Withdrawals are processed immediately but it may take some time depending on the blockchain.
How long for Binance withdrawal to bank account?
Withdrawals are processed immediately but it may take some time depending on the blockchain and your bank setup.
What are the fees for Binance withdrawal?
It will depend on the blockchain you use, and if it’s congested it takes longer.
Can you withdraw fiat from Binance?
Yes, but only to some countries listed here.
What’s the minimum withdrawal amount on Binance?
Each crypto has a different minimum allowed withdrawal which you will see on the withdrawal screen.