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Starting on September 12, US residents will be blocked from trading on Binance. Traders will have to wait until the exchange launches Binance US. Many are disappointed, even though Binance has warned everyone in advance and nobody will lose their money. But what if you suddenly get banned and all your orders are automatically closed? In this post, we’ll explore why traders usually get banned and how you can avoid it.
Leading exchanges don’t ban users for no reason. If your account got blocked, the exchange must believe that you’ve violated one of its terms listed in the user agreement or the agreement itself was recently changed, banning something that you were doing. Though few traders read user agreements, they really should. Such documents usually list all major reasons for a ban.
1. Crypto tumblers and dirty Bitcoins
Here’s an excerpt from the rules of BitMEX – an exchange specializing in Bitcoin trading.
“You must not carry out any activity that involves proceeds from any illegal or unlawful activity (including activities relating to cryptocurrency tumblers, darknet markets, money laundering or terrorism financing).”
How did crypto tumblers end up on the blacklist? It’s very simple. True, mixers/tumblers themselves are legal (for now). But they can be used to “wash|”dirty crypto – that is, coins used to launder money, hide traces of crypto theft, finance terrorism, and so forth. What is the risk that an exchange will catch you using “washed” coins? Probably not very high. But remember: every Bitcoin that you deposit in your trading account after passing it through a tumbler gives the exchange sufficient grounds for a ban.
There’s another side to this: if you accidentally buy a Bitcoin that has been used in some criminal activity,