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Several crypto exchanges, including Coinbase, Binance, Gemini and Kraken, had technical issues due to a massive Bitcoin sell-off following the crash in crypto prices in May. Now some investors are filing class action lawsuits to make up for their losses, particularly against Binance.
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Find: Coinbase vs. Binance: Which Cryptocurrency Exchange Is Better?
Last week, leading Italian independent law firm Lexia Avvocati – in collaboration with the Swiss blockchain consortium – was hired by a group of Italian and international investors to launch a legal initiative against the Binance cryptocurrency exchange. The aim of the class action is, among other things, the assertion of damages suffered by investors on the “Binance Futures” platform due to the violation of the trading rules and anomalies in relation to the functioning of the trading platform according to the website of the legal group. The platform offered derivative financial instruments – “futures” – without being licensed by the competent authority. In addition, the lawsuit relies on a lack of information from the investors.
According to Business Insider, Lexia is taking legal action against Binance for trading losses suffered during platform outages on different days – April 18, May 5, May 19, May 28, June 4 and February 8, the day on which Tesla announced its $ 1.5 billion purchase of Bitcoin.
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The complainants allege that the compensation Binance is currently offering is a “pathetic amount” and have given the company until July 12 to make an offer to that effect. They also threatened to seek regulatory help from the European Union and Switzerland.
In addition, the Wall Street Journal reports that a group of around 700 traders in France are also working with a lawyer to offset their losses.
The story goes on
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On July 7, Binance CEO Changpeng Zhao wrote an open letter following what he believes is “the recent hyperfocus on regulation regarding Binance.” The letter contained the following statement:
“As a four-year-old startup, Binance still has plenty of room to grow. Binance has grown very quickly and we haven’t always got everything just right, but we are learning and improving every day. We hope to clarify and reaffirm our commitment to working with regulators and to proactively recruit more talent and put in place more systems and processes to protect our users. “
In the letter, Zhao also mentions specific steps the company will take, including expanding its international compliance team; Expand its “already robust compliance partnerships” and localize its operations and businesses to comply with local regulations.
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“But this lofty vision will not be possible without the support and guidance of regulators and policymakers, who know that innovation has the longest-term and most sustainable effects when mitigated with frameworks to protect all participants. We humbly welcome more constructive guidance to help us grow better. We humbly welcome more able talent and seasoned consultants who join us to build better, ”he wrote.
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Last updated: July 12, 2021
This article originally appeared on GOBankingRates.com: Binance faces class action lawsuits amid major outages during the Bitcoin crash