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Stuart J
Stuart J, Solicitor
Category: Law
Satisfied Customers: 24624
Experience:  Senior Partner at Berkson Wallace
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I have tried to open an account with Binance and been told

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Hi. I have tried to open an account with Binance and been told that in order to verify myself I have to make a substantial deposit (over £3,000) is this true or usual?
JA: Where are you? It matters because laws vary by location.
Customer: County Durham UK
JA: What steps have you taken so far?
Customer: None
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: Yes. A third party has approached me regarding this saying I can get a refund from FXVC where I had shares, as my account is now liquidated. My refund will be in Bitcoin, which I know nothing about.

Hello. Thank you for the question. It is my pleasure to assist your with this today.

Please bear with me and I will be online and off-line from time to time and therefore, may be delayed getting back to you. You will receive an email when I reply.

Have you researched Binance and FXCV?

have you paid them anything at all?

and what was liquidated and did you get any money back

There are certain banks which require you to have a substantial deposit to open and I seem to remember that Coutts (long established) was one of them.

You also need to be aware that the scam has perpetrated yet another scam usually from within the original company.  Somebody will contact you, knowing that you lost a whole load of money, and say that they can get it back for you for a fee.  You guessed.  You pay the fee that’s the last you hear of that.

So before opening the account, I would be more concerned about the third party and whether that is legitimate and why they don’t want to pay you in good old money.

Customer: replied 14 days ago.
Money that I lost during lockdown, invested in gold etc was lost. I understood it to be lost forever, but recently I was approached by a third party, firstly a call from a UK number (07723 355526) telling me that I was entitled to a refund. I opened an account with Binance and deposited just over £3,000 supposedly as part of my verification. I then received a call from "Michael Cohen" in Pennsylania USA who explained that I needed to deposit another £3,400 due to the increase in value of the money I would receive back from FXVC. I did that and the money is being held in an escrow account. I believe it is as I have looked at the transfers in my Binance account. However, I have now been told that although that money is not "lost", it has not gone through the transfer system from bitcoin to cash in my bank account (I have no idea what that means) and I am now expected to deposit another amount of nearly £4,000. According to Michael Cohen this will all be refunde4d into my bank account, along with approx £18,000 that I am due from FXVC. As I really don't understand any of this, I am beginning to think it's a scam. A bit late, I realise, but better late than never. However, the information that I do understand all bears out as "true". I have contacted Binance and they have confirmed that the money is now in an escrow account, but can add no information beyond that. The Pennsylvania phone numer is +1(###) ###-#### Obviously I am reluctant to deposit any more money without advise from someone who understands it better.
Thanks for your help and I will happily pay any fees to help sort this mess I have gotten into. I will leave this webpage open, but have to go to a doctors appointment myself at 4pm. It will take some time as I am a wheelchair user. Thanks again, John Gordon
Customer: replied 14 days ago.
A call may help but perhaps we can schedule that for another time, as I have to go out to doctors now. Also, it would be better when my partner is present as she will assist with questions etc. How and when do I pay the fee? Thank you.

At present, there are probably more Bitcoin, Forex and Binary options scams than legitimate schemes.

A regular and common scam is that you put a little bit of money in Com you trade, and you get a good return.  You may take the money out without problem.  You may do it again several times.  You may refer it to other people saying how good it is.

So having realise that this is a good and legitimate scheme and you have made a bit of money from it, you then do a bit more and a bit more and a bit more and potentially spend an awful lot of money.  That’s when the emails stop being replied to and you could no longer get your money.

What happens is that either communication stops or they want a fee for some kind of spurious licence required by the authorities in Singapore, Timbuktu, Latvia, Estonia, the Dominican Republic, or somewhere else where it’s impossible to find out if it’s legitimate or not.  Here is just one article on this subject

If it is a scam, then all you can do is report it to the police and Action Fraud but don’t expect to get your money back.

I’m sorry to say that I’ve dealt with dozens of these.  In fact, I’ve dealt with dozens of these fraudulent ones but I’ve only had one where it was a legitimate company and the person was having trouble getting his investment back.  If it is a legitimate company, you can of course complain to the Financial Ombudsman provided the company is registered with the Financial Conduct Authority otherwise it’s a case of taking them to court.  No point in taking a fraudulent or scam company to court.

There is something else that you can do and that is make a complaint to the bank that released the funds to the scam organisation on the basis that the bank breached their duty of care.  The bank are not likely to roll over and you can then make a complaint to the Financial Ombudsman.

There is a process that you need to go through although you can phone them, you will need to put everything in writing

What is extremely frustrating, and I don’t know why the government have not done anything about it, is that if these banks all spoke to each other about where the money had gone from bank to bank to bank, then these scams would stop.

Let’s face it, the money stays in the banking system because tens of thousands of pounds of cash is no good to anybody because of all the money laundering regulations.  So it remains in the banking system somewhere, it’s just a case of each bank speaking to another bank to find out where it went.  They just don’t do it.

Moving back to your particular case, I can’t see now why they want more money in to get your money out?  It doesn’t make sense and I’m sorry to say that whilst I can’t confirm whether this is or is not legal, I don’t like the smell of it.

If you have already deposited GBP3000, tell them that you don’t want to go ahead and can you have your money back?  If they send the money back, the chance is it’s not a scam but I can’t guarantee that.  If they will not send the money back, then draw your own conclusions

Customer: replied 14 days ago.
Thank you Stuart

It was my pleasure to assist you. Please come back if anything else crops up and needs clarification.
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