A crypto trader living outside the United States reportedly cannot withdraw around 400,000 USDT from Binance after the exchange cited an order from a federal court in Colorado. The incident came to light in an X post by crypto trader ye.koi, who shared details provided by a user named Shawn (@Shawn126888).
Even after reportedly submitting documents showing where the money came from, he was told by Binance support to take the matter up with the US District Court for the District of Colorado, despite not being a US citizen or resident.
The user maintained that his trading was legitimate and questioned why his entire account had been locked rather than only the funds allegedly connected to the court case.
The court order has not yet been independently verified, so the precise legal grounds for the account freeze and its scope remain unclear.
How Could a US Court Affect an Overseas Binance Account?
A person’s physical location does not always determine whether a US court case can reach their funds or property.
A court’s authority to intervene can depend on its legal jurisdiction over the company holding the funds, the people involved in the dispute, and the specific assets named in the court order, which is not available in this case.
If an exchange is subject to a valid US court order, it may have to freeze assets under its control, even when a customer lives overseas. The exact wording of the order is crucial. The specific Binance entity involved and how closely it is connected to the US also matter.
For example, Rule 65 of the US Federal Rules of Civil Procedure provides that certain injunctions can apply to the parties involved and people working closely with them once they have been officially notified.
Still, a US court does not automatically have unlimited authority over every foreign exchange or account worldwide.
Follow us on X for real-time crypto updates.
Exchange Freeze vs. Court Freeze
An exchange can suspend withdrawals on its own while conducting internal security checks, for example, if a transfer triggers anti-money laundering alerts or appears suspicious. That differs from a court-ordered freeze, in which the platform is following a judge’s legal instructions.
Binance’s law enforcement guidelines state that certain investigative requests require valid legal documents from the appropriate authorities. Its legal support guidance also provides legal representatives with a way to seek assistance with court-ordered freezes or disclosure requests.
Evidence that the trading was legitimate might help resolve a compliance review, but it will not automatically lift a court order.
To challenge a freeze, a user could seek details of the order, obtain the case number and court information, consult a lawyer familiar with US asset forfeiture cases, and determine whether the freeze covers the entire account or only specific assets.
Subscribe to our YouTube channel for the latest crypto news.
Related: CZ Dismisses Binance 335M-Record Data Breach Claim as a $900K Scam
