Legal Litigation Against Binance – All You Need to Know
A group of disgruntled investors is suing Binance. The company caused millions of losses to investors as a result of an unforeseen shortfall earlier this year. The case before the International Business Arbitration Court became the largest lawsuit ever filed against a cryptocurrency platform. So, it is interesting how the court plans to protect investors’ rights.
The case concerns a massive shutdown of services on May 19, which coincided with an enormous drop in the price of Bitcoin. Binance was not the only platform that suffered as mass sales blocked blockchain transactions and exceeded reserves. However, the complex financial products offered by the venue made the losses particularly large-scale. Many of Binance’s leverage and futures traders had their accounts automatically.
More than 700 people faced issues from the freeze, while the early participants in the new rally lost $ 12 million. If the complaint is upheld, the balance sheet will have to pay for the loss out of its pocket and be forced to take full responsibility for the demands of the investors.
One of the affected Canadian investors says he tried to close his account as early as May 19 in the afternoon. But a platform flaw did not allow him to do so. He said he lost $ 6 million due to the site shutdown.
Binance Position
According to a comment released by Binance, “On May 19, almost all cryptocurrency exchanges temporarily shut down due to market volatility.” The company immediately took steps to reach out to customers affected by the shutdown and resume trading quickly.
A company spokesman said the organization is acting reasonably. In fact, it is ready to compensate the actual trade losses to the affected investors.
Binance Terms of Service require that all legal proceedings go through the Hong Kong International Arbitration Center. This court typically settles transnational business disputes. The plaintiffs hope that all the victims become satisfied due to Binance’s defect.
The plaintiffs hope to attract more victims before filing a lawsuit in Hong Kong.
Without a national body of law, arbitrators rely on international standards of business practice. Without government protection, the parties incur high costs to start the process, although the prices vary. Like ordinary courts, the Hong Kong Arbitration Center has the authority to make a payment if the investors’ request becomes met.
Binance started in 2017 and had the image of a very successful cryptocurrency platform. According to the forum, it handles more than a million trades every second. The platform is officially blocked for work in the UK.
