Why Exchanges Freeze Your Funds: Real Cases and Risks
In the rapidly evolving world of cryptocurrency, the line between security and compliance is increasingly blurred. As more exchanges tighten their rules and freeze user funds without warning, it's essential to understand why this happens and what it means for users.
The Rise of Compliance and Reputation
Exchanges are under pressure from regulatory bodies like OFAC (Office of Foreign Assets Control) to prevent money laundering and terrorist financing. The consequences can be severe, as seen in the case of Garantex, where $26 million was seized by U.S. authorities due to links to suspicious transactions.
WazirX's decision to freeze over $3 million in user assets after a hack serves as another example. While the exchange cited ecosystem protection, the reality is that exchanges are obligated to take action when they receive "dirty" coins from sanctioned addresses, hackers, or mixers.
The Role of AML Policies
Anti-Money Laundering (AML) policies have become increasingly stringent in recent years. Exchanges must now verify the origin of incoming funds and ensure that users are not unknowingly sending "dirty" coins to their wallets.
This means that exchanges will freeze user funds if they detect suspicious activity, such as OFAC sanctions, Tornado Cash links, or unusual transaction chains.
The Importance of Wallet Scanning
Before sending cryptocurrency to an exchange, it's crucial to scan your wallet for risks. This simple step can save you months of disputes and financial lockouts.
Wallet scanning services like ScanMyWallet.Network bring together almost all the most popular tools in one place, allowing users to quickly scan their addresses before sending funds to an exchange or crypto service.
How Wallet Scanning Works
- Select a blockchain – Supports Bitcoin (BTC), Ethereum (ETH), Tron (TRX), BSC, and more.
- Enter your wallet address – The services analyze transaction history.
- Database cross-checking – Compares addresses against mixers, hacks, sanction lists, and more.
This aggregator is a convenient tool for assessing crypto risks before interacting with exchanges. With AML policies becoming stricter, such checks help avoid frozen funds and financial lockouts.
The Benefits of Wallet Scanning
Checking your wallet for transaction integrity is a necessity in today's world of cryptocurrency. By scanning your wallet, you can:
- Avoid frozen funds and financial lockouts
- Save months of disputes
- Maintain a clean reputation for yourself and your wallet
It takes just a minute to scan your wallet, but the potential consequences are months-long. Don't wait until it's too late – start scanning your wallet today.