Zero liability: Loss through the fault of Binance amounting to 86,000 USDT
Opened tickets in 2 years (all regarding this incident):
Loss: 85689 USDT
Dispute from 09/21/2018
The incident occurred on September 21, 2018, an XRP token was purchased in the amount of 388.148 USDT at a price of 0.77 USDT. When trying to put this XRP token for sale at a price of 0.78 USDT, the system did not work, meaning that it did not work to place an order. Then the situation developed quite surprisingly, the Binance exchange stopped responding to any attempts to place orders for the sale of XRP tokens and put up the order only after 10-15 minutes.
Naturally, over the specified period of time, the price of the XRP token has changed - it has decreased and significantly. After placing an order for sale, due to a bad exchange, we suffered a loss, the purchase amount was 388.148 USD, the sale price was 302.148 USDT. The loss amounted to more than (we do not include the exchange commission for the purchase / sale) 85.689 USDT.
It is important to note that as soon as the problem with the Web interface appeared, we immediately created Ticket # 1060441 (Orders do not work) – but alas, they did not answer it right away, the price went down and we forcibly sold XRP tokens to a loss,although, by working properly, the exchanges could make a profit or a minor loss (at the time of the sale of XRP, the peak price and the volume of the purchase / sale was quite sufficient to make a profit or a slight loss).
We publish photos of transactions with the marked parameters – purchases, sales:
After that, we’ve pinned all hopes on the Binance Support Center. The ticket #1060441 (Orders do not work) created at the time of the problem was closed by the appointed CS agent Carlos with the status “Completed” without even answering it.We have created a new Ticket #1060576, which fortunately was not closed by the appointed CS agent Carlos. His answer was:
Assuming that the Binance exchange interface has started to work and it was possible to place orders for sale / purchase, although our ticket was no longer about the fact that you can’t place an order, but about the fact that it was impossible to do it within 10-15 minutes (approximately)
we suffered a significant loss, and this loss is not the trader’s fault, but the Binance fault —which is specifically or due to technical problems that did not allow the trader’s order and did not sell XRP tokens at the market price.
Carlos’ answer was not a surprise, as Support Center employees rarely delve into problems, but respond with pre-built templates (so as not to waste time). We tried to object and convey our point of view, but we received a very specific answer – a link to the rules, and no responsibility for a technical failure due to Binance. After that, the ticket was closed by Carlos from CS.
We took a break to resolve the issue from a legal point of view: we’ve studied the forums, studied the Binance rules, studied the form of ownership, regulation of the exchange, attempted to find a company office, or at least information about the company. At the same time, we consulted with lawyers on this conflict, found a lot of evidence on the forums that such technical failures (at certain peaks) on Binance occur (have occurred, and probably still are) even today. This means that a similar problem (the inability to place orders to buy or sell through the web interface at peak moments) was faced not only by us, but also by other users on September 21, 2018, and also earlier and later than the specified date.
On May 8, 2019 (after 8 months) we created a new ticket # 1464471 – where we warned that the specified loss was the fault of the Binance exchange, and it should be compensated. For more information, we’ve consulted with lawyers and were ready for legal action in this conflict.
We did not forget to indicate that we are not conflicting customers - we are ready to try to find a common denominator, negotiate and by all means find a solution to this problem. As expected, this ticket was closed without response from Binance. The status was “Completed” although neither the answer to the ticket nor the solution to the problem was provided by the Support Center employees.
The correspondence lasted for a long time – we described our vision of the problem and received answers in the form of a link to the Rules:
Where Binance does not bear any responsibility for any of its actions, even the main ones (for its intended purpose - like an exchange), does not guarantee anything, does not promise, and does not owe anything to the client. But at the same time, Binance takes a fine commission for any actions of the trader, without providing him with proper service and proper execution of his instructions as an exchange (the exchange has no other functions). After that, Binance employees decided to look at what kind of deals these were – they could not find in the specified period of time (did not take into account the time difference), how they checked the statistics is not entirely clear, considering that all the buy / sell transactions are in the account. They did find the necessary information.
After that, the correspondence continued, the apotheosis of the correspondence was the offer of compensation in 10 BNB and a gift – a sweatshirt. Given a loss of almost $90,000, such compensation seemed ridiculous to us:
Correspondence continued and in the end they are ready to give us 5% of the loss, $4,284.45 to be precise. Please pay attention, this is not about compensation (!), but about a gift in the indicated volume in the BNB token:
Ultimately, 254.42 BNB were accrued, which amounted to 8.568 USDT at the exchange rate – 10% of the losses incurred. This was a gift from the Binance exchange, while Binance did not provide any compensation of neither losses nor legal expenses:
Gifts were credited to the account, even though my partner planned to be at the Binance Meetup in Moscow, Russia on June 4, 2019 and talk personally with a representative of the exchange. We were advised to chat with Gleb Kostarev (Binance representative in the CIS):
At the meeting in Moscow (June 4, 2019), our partner was present at the Binance Meetup, we could not communicate with anyone other than Gleb Kostarev. He handed him a personally sealed envelope with a description of our conflict and claims. I was able to communicate personally with Gleb Kostarev by mobile phone where we reported as much as possible about the situation, the loss received as a GIFT and the claim as a whole, since the amount of the gift did not compensate for the loss to a large extent. Through Ticket, we notified that the claim is still valid and explained the reasons for that:
We have initiated negotiations, where we demanded compensation and even (!) agreed to incur a loss in equal parts with the exchange (50/50) but alas, it did not work out:
We let them know that, as part of our reluctance to reach a general agreement, we will be forced to notify regulators and law enforcement agencies of scam committed against us (and this is exactly how we see this situation):We didn’t receive an answer. We have fulfilled our promises and sent complaints and applications regarding Binance to the largest possible list of law enforcement agencies, regulators and international organizations:
In general, after that was done, there was no dialogue with Binance anymore. Being offended by their scamulent actions, our friends from Binance closed the ticket.
June 23, 2019 – we’ve raised the question again, through the creation of Ticket #1718499 which Binance employees closed after 3 days.
September 6, 2019 – ticket #1985710 was created. We tried to find common ground by reducing our financial requirements. The ticket was closed after a week without any particular answers or attempts to start a dialogue.Despite the fact that feedback has already been received from FBI (New York) and our website Scambinance.com has been created again, there is no reaction or attempt to return the money that Binance stole from the trader.
All tickets created in the future: September 14, 2019 - # 2004928, March 3, 2020 - # 2639524, April 3, 2020 - # 2840572, April 18, 2020 - # 2933500, May 14, 2020 - # 3139655 - were closed without an answer.
In general, the situation is extremely simple: Having bought an XRP token at a price of 0.77 USDT for 1 unit, while trying to sell a token at a price of 0.78 USDT for 1 unit, despite the fact that the market price rose to 0.799 USDT for 1 unit - the Binance exchange did not give an opportunity to put up and execute the order for sale. For almost 30 minutes, the system did not work and orders were not executed, after the Binance exchange earned the price dropped, a "loss" was formed during the sale. It is worth replacing that instead of the profit on the deal, which could have been, we received a "loss" solely through the fault of Binance. Who, in turn, after 2 years of communication, made a gift in the amount of 10% of the stolen money and on this, considered his mission accomplished. No negotiations made it possible to fix the loss below, for example, with compensation of 25-50-80%, although there were options from our side. Binance at the time of communication, for 2 years, could not provide the contacts of the legal department, the physical or legal address of the company, the contacts of one or another head of Binance, for 2 years of communication, Binance has not been able to respond to requests by e-mail. The result is logical: The actions of an underground organization that operates on the Internet under the guise of "Binance exchange" caused damage in the amount of 85689 USDT (minimum), followed by fraudulent actions by the same "Binance exchange".
Screenshots showing the price rise to 0.80 USDT (almost), time of transactions, volumes:
An attempt to resolve the issue, or at least to reach the management of the Binance exchange, did not bring any results:
- Binance did not provide their data (company, jurisdiction, management data, data of the legal department) - they simply refused to provide this data (we have this Tickets correspondence)"
- Binance did not respond to any mails that were sent not to the Support Center – not a single department did not offer feedback, did not transfer contacts or at least somehow showed signs of life
- Binance made a gift, and considered this gift to be sufficient compensation for losses caused by the exchange through its own fault (and not the fault of the trader)
- None of the representatives of Binance wanted to resolve the issue or provide assistance, and we talked with Gleb Kostarev (representative in the CIS), and Ivan Pascal (representative of Ukraine), and even with Anatoly Rybachok (lawyer from Ukraine, who represented Binance in the BULL/BEAR tokens conflict)
As a result, ScamBinance.com resource was created, because there is a clear understanding that Binance is an underground organization (at the casino level) that deals with financial crimes and outright scam:
- Manipulations of increase of trade volumes by hundreds of times
- Manipulations with the cryptocurrency market on its platform
- Permanent scam of users regarding trading, volumes, information about securities on the exchange, regulation of the exchange as a financial player in general
- Manipulation and issuance of securities without proper clearance, including the BNB token
- Conducting illegal ICO, IEO events on its platform
- Lack of a regulator to work in ANY country in the world
- Work with fiat means of payment and currencies (before, they only accepted cryptocurrency and supposedly did not need a license), now they accept Russian rubles, Ukrainian hryvnia, and plastic cards, but regulation has not appeared
- Trading bets with fiat currencies, which is basically a Forex market, without a license, without regulation in general
- Concealment of data on the legal entity, employees, location (or rather, the complete lack of a physical address of the Binance casino
- If Binance is a crypto casino then even for a casino, you need to get a license. This exchange does not have it
- Given the work process, any financial irregularities and crimes may occur on the Binance platform
- Permanent deception by Binance employees, scandals, manipulations with any tokens, manipulations with the exchange rate, including publicly via Twitter by Mr. CZ
- Lack of any integral communication with the Binance managers to solve even the simplest questions
- Illegal operation of the exchange in most countries of the world
We’ve sent a Settlement Agreement in April 2020 through a legal representative (Anatoly Rybachko) and within a month we were promised a “response or reaction to the agreement” but alas, another 1 month was wasted. In regards to the global pandemic, many processes and communication with regulated authorities, which we plan to restart, will tell about the requirements and allegations of scam (including financial) and about going to court with a lawsuit, which can even be a collective one, since the amount of lost funds from the actions of Binance is huge.
There is a maximum public involvement in the problem of Binance, which are engaged in criminal and criminal activities, with a clear belief that such activities should be stopped at once. We are ready to represent the interests of other traders who have been deceived in one form or another. In the world of cryptocurrencies, there is no center that would try to unite investors and traders in order to protect their rights.
But in order to prove their case, it is necessary and possible to do that only through joint efforts and team work.
Currently, we are still ready for dialogue and an attempt to resolve our financial conflict. We have been trying for almost 2 years (since September 2018) to assert our rights and recover damages from Binance's actions through pre-trial procedures or through legal proceedings.
Binance is now the main threat to the crypto world and may repeat the fate of other illegal exchanges, such as WEX, BTC-E, and Mt Gox.