She listed several types of funds and asked everyone not to transfer them to Binance: “USDT bought at a discount from a friend,” “coins sent on-chain by relatives,” “money from doing business in Myanmar,” “payments collected in Cambodia,” and “a friend’s money that just passed through my account.” The reason was that the associated addresses for these funds had already been flagged before reaching Binance. Depositing them could lead to an enforcement freeze. Cases take a long time to resolve, and Binance doesn’t have the authority to unfreeze the funds.

The comments section was once again split between two camps.

The reply at the top was just one sentence: “Translation: As someone who trades on-chain shitcoins, I’m going to confiscate your money.” Someone else asked: “I thought Bitcoin couldn’t be frozen?”

Others have been through this too. @SuperBILI said that when they first got into the scene, they sold U, and the merchant said their limit was used up. They had a colleague’s bank card make the transfer instead, and it ended up frozen for five or six years. Even now, it still affects their banking transactions.

Both sides are telling the truth. Bitcoin in your own wallet really can’t be frozen by anyone. But as soon as money moves from the blockchain to an exchange, or into a bank account, you have to explain where it came from. Freezes all happen at this entry point.

Taken together, the events of the past two days make the message pretty clear. This morning, OKX asked people not to transfer money in from MEXC. By evening, Binance had listed several types of funds that shouldn’t be transferred in, and Bitget Wallet was also refusing bank card deposits funded from MEXC. The wording differs, but the message is the same: before money comes in, they want to know where it came from.

I think what makes people uneasy is that the types of funds He Yi listed don’t sound like anything bad. @Eth527 put it bluntly: discounted U from a friend, helping someone move a payment—both sound like ordinary favors.

A lot of people have U with one or two transactions whose origins are hard to explain: exchanged over the counter, received in a group, or sent by someone else. People used to assume that if you could deposit it into an exchange, it was fine. That assumption is changing now.

I suspect fewer and fewer people will be willing to accept cheap U, over-the-counter U will get more expensive, and U with a clear provenance will be worth more than U of uncertain origin. Some people are already teaching others how to check the sender’s address before accepting U.

U is still U; it’s just starting to be judged by its origin.

Can you explain where all the U you hold came from?

Before accepting it, you can use @evilcos’s @MistTrack_io to check whether the address has assets that have been flagged. Any other tool recommendations?

—

This article was first published on X by @musinoot