Group of international traders blamed Binance for $20m loss

August 26, 2021

Group of international traders blamed Binance for $20m loss

A group of international traders has filed a lawsuit against cryptocurrency exchange Binance. They have accused the company of failing to provide access to infrastructure during peak times and multimillion losses, the Financial Times reports.

The plaintiffs are six traders from Ukraine, Australia, France and the US. They have valued the claim at more than $20m and hope that several hundred more investors will sign up to their complaint.

The digital asset market collapsed in May amid restrictions by Chinese authorities. Traders allege that the Binance futures platform experienced a failure on May 19, rendering it inaccessible. The plaintiffs' positions were forcibly liquidated as they were unable to adjust them.

Swiss firm Liti Capital will contribute at least $5 million to fund the lawsuit against Binance in Hong Kong, with New York-based law firm White & Case representing the plaintiffs.

"One way or another, this is going to be a landmark case. We're going to find out what restrictions, if any, exist on what these huge organisations can and cannot do," said Liti Capital executive chairman David Kaye.

In July, a similar lawsuit against Binance was filed by Italian law firm Lexia Avvocati. Together with the Swiss Blockchain Consortium, it is acting on behalf of traders affected by the disruption.

Lexia Avvocati said the exchange had agreed to compensate customers for some of the money lost and described the amount of compensation as "pathetic" and "ludicrous". The firm intends to seek regulatory restrictions for Binance in Switzerland and the European Union.

As a reminder, in July Binance announced plans to roll back the ability to trade crypto derivatives in Europe, starting with Germany, Italy and the Netherlands.

In August, the exchange made a similar decision for Hong Kong customers.

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About the author

Hi there, my name is Zalman Weinberg. I'm enthusiast with over 7 years of experience in cryptocurrencies and blockchain. Professional Trader providing Blockchain solutions to Startups and Enterprises. Expert in all cryptocurrency exchange APIs (BitMEX, Bittrex, Binance, Bitfinex, Kraken, Poloniex, Gdax etc.). I have also worked with multiple Forex broker APIs.

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