Publication date: 22.05.2025
Lawyer, specialist in the practice of international corporate law, fintech and legal support of businesses in the EU and Asia. A lot of practical experience and successful cases in the portfolio.
The client reached out to us after his account on the ByBit cryptocurrency platform was restricted, with a balance of 5 Bitcoin and $30,000 in the USDT stablecoin.
The account was frozen due to suspicions from the platform’s compliance department regarding potentially risky financial activities. Such cases are typically linked to anti-financial crime checks, including anti-money laundering (AML), counter-terrorism financing (CTF), and interactions with unreliable crypto platforms.
These circumstances are not uncommon among crypto asset holders. Despite the growing popularity of cryptocurrency, it remains a volatile financial tool due to its high level of anonymity and the lack of comprehensive regulation in many jurisdictions.
What is Cryptocurrency?
Cryptocurrency is a form of digital money created using cryptographic algorithms to ensure transaction security. Unlike traditional currencies, cryptocurrencies are not issued or controlled by a central authority and most operate on blockchain technology.
Blockchain is a decentralized ledger that records all operations with digital assets. It is immutable and tamper-proof, providing a high level of reliability and transparency.
The most widely used digital currencies include Bitcoin, Ethereum, Ripple, Litecoin, and Tether (USDT). They are used for investments, payments, and capital storage. However, the lack of regulatory oversight makes them appealing for use in unlawful activities.
Why Are Crypto Exchange Accounts Frozen?
Account suspensions on platforms like ByBit may occur for various reasons. The most common cause is suspicion that the digital assets have an illicit or questionable origin. Cryptocurrency exchanges strictly enforce financial compliance policies and closely monitor user transactions.
Identity verification and transaction monitoring are key tools for preventing illegal activity.
Accounts may be frozen under the following conditions:
- Suspicion of unlawful asset origin: if the exchange believes the cryptocurrency was obtained through illegal or unethical means.
- Transactions with high-risk platforms: interaction with services known for fraud or criminal associations.
- Violation of AML/CTF standards: user activity breaches anti-money laundering and anti-terrorism financing policies.
In such situations, exchanges typically request explanations and supporting documents — proof of fund origin, third-party connections, and other official confirmations — to initiate the account recovery process.
How We Helped Resolve the Issue
Our legal team promptly assessed the situation and provided comprehensive support to the client whose account was frozen by ByBit. We began with an in-depth review of all transaction history and compiled the necessary documentation to prove the legitimacy of the crypto assets. Here’s what we did:
- Collected and structured supporting evidence: including bank statements, tax declarations, and other records verifying the source of funds.
- Prepared detailed legal explanations: our lawyers drafted a clear justification confirming the client’s lack of ties to suspicious crypto platforms and compliance with legal requirements.
- Established official communication with ByBit's compliance team: we maintained ongoing contact with the exchange, promptly responding to inquiries and submitting all necessary clarifications.
As a result, just four days after we began working on the case, the client’s account was fully restored. They regained control over their funds and preserved their reputation with the exchange.
Thanks to our professional legal assistance, the client successfully resolved a complex issue with a frozen crypto account. We demonstrated the legitimacy of their transactions and ensured full protection of their interests. This case highlights the importance of AML/CTF compliance and the value of qualified legal support in the crypto space.
