Major Russian exchange freezes $4m of user assets, citing money laundering

Russian cryptocurrency exchange Beribit faces fraud allegations after refusing to refund customers’ money.

Russian media reports that the crypto exchange administration requires a certificate of the legality of income from Beribit victims in order to avoid paying debts. Just 19 of 100 exchange clients have received money.

According to some estimates, the total amount of funds blocked on Beribit could reach 400 million rubles, equal to about $4.3 million. Previously, representatives of the platform confirmed damages in the amount of 24.9 million rubles, about $263,000, but this is only a small part of the total amount of frozen assets.

Only 11 clients have passed the audit and are supposed to receive their funds in the coming days. However, in the middle of the night, users received messages from Beribit, demanding they provide evidence that they were not laundering money through exchanges.

Owners of crypto wallets suspect that the exchange is changing conditions, asking for personal information, and looking for an excuse to pocket the money.

The scandal surrounding Beribit broke out back in March when searches were carried out in the company’s Moscow offices. In April, the exchange reported technical problems with the withdrawal of cryptocurrency, which it later explained by a change in management and reporting inconsistencies. After a crowd of outraged customers arrived outside Beribit’s office, the company promised to fully pay users.

However, so far Beribit has not delivered on its promises, and platform customers continue to complain about the inability to withdraw funds.