LBank Rejects $1M Freeze Claim, Threatens Legal Action

LBank has publicly rejected a Korean trader's claim that it froze roughly $1 million in USDT and blocked him from closing futures positions that were later liquidated. In a Nov. 10 post on X, the exchange said trading and withdrawals were running normally platform-wide and that it was working directly with the affected user.

The trader, posting as @solyflw34, tells a different story. He says withdrawal and futures restrictions began separately in September, after an October rejection, and that private attempts to resolve the dispute went nowhere.

"We don't restrict accounts just because someone makes a profit," LBank wrote in its statement.

What does the timeline show?

The dispute traces back to profitable high-leverage futures trading from Aug. 31. The trader's initial post named XRP, DOGE, XLM, NEAR, FIL and SUI among the assets traded, all major altcoins with substantial market capitalization and volume.

On Sept. 19, while withdrawing part of his funds, he says withdrawals were restricted without warning. LBank requested additional verification and identity checks. He says he completed them and waited.

Ten days later, on Sept. 29, the exchange restricted futures trading and asked for a detailed explanation of his activity. He says the restrictions prevented him from managing or closing existing positions, which were liquidated as prices fell.

The trader distinguishes those liquidations from the roughly 1 million USDT still sitting in his spot account, which he wants released. His posts do not claim the entire disputed sum was lost through liquidation.

An Oct. 14 response, reproduced in a screenshot he shared, stated that "the relevant abnormal funds will not be released."

He says he repeatedly asked which orders were abnormal, which trades allegedly involved manipulation, which accounts were linked to his, and how much money LBank had classified as abnormal. He says none of those questions drew a detailed answer.

What did risk control actually allege?

A message attributed to LBank's Risk Control Team cited virtual environments used for registration or login, device modification tools, abnormal device fingerprints and emulator-related features.

The review said those findings indicated patterns commonly associated with multiple accounts under coordinated control. The message separately alleged suspiciously timed position openings and closings, and trading patterns that followed coordinated market activity, raising concerns about possible manipulation or insider trading.

Citing provisions of its user agreement, the team said the funds would stay frozen. The reproduced message did not identify specific orders, associated accounts or the agreement clauses supporting the decision.

The trader rejects the allegations. He posted trading-history screenshots and links to supporting files, calling his activity legitimate. A separate post from @eth_apple, who described himself as a friend, repeated the complaint and said the trader was using his own money.

How far could this escalate?

LBank says it has engaged outside legal counsel to address statements it considers false or misleading. It warned that people publishing defamatory claims could face legal action and asked media outlets and creators to correct inaccurate coverage. The company said it would share information while protecting the user's privacy.

The trader says he contacted his account manager, customer support and sent a formal legal notice to LBank's legal team, allowing seven days for a response before going public. He says he will escalate to organizations including Bithumb and the Digital Asset eXchange Alliance, known as DAXA.

Blockchain investigator ZachXBT has also weighed in, criticizing favorable posts about LBank and accusing its key opinion leaders of quoting the exchange with "the same script." His screenshot showed several accounts describing long relationships with the team and praising its communication; some explicitly referred to working with LBank.

The dispute lands against a tightening regulatory backdrop in Asia. South Korea ordered 27 exchange websites blocked in October over unregistered operations, including KuCoin, MEXC and BingX. In Kazakhstan, LBank was removed from court injunctions after restricting access to its services, per an Oct. 20 account of proceedings; a Sept. 18 amendment left six other platforms subject to the orders.

With the trader promising a DAXA escalation and LBank promising litigation, the seven-day clock he set before going public suggests the next move — legal, regulatory or reputational — will come fast.