Investors have sued Binance collectively for tens of millions because of the outages on the futures platformWell, my dear colleagues, friends, brothers - it is done! The first class action lawsuit directly against Binance fraud is already in the works. It's a pity that we had nothing to do with it, we didn't have time, we didn't see the practical benefit in it - but we saw an opportunity and soon, we too will participate in this battle with Binance Casino.
Italian law firm Lexia Avvocati, along with a group of investors from around the world, filed a lawsuit against the cryptocurrency exchange Binance, accusing it of violating its own rules when servicing trades on the futures platform. In this way, the company seeks to recover compensation for customers who lost money trading in cryptocurrency derivatives - the problem arose on February 8, 201 (Binance was unavailable to traders for several hours).
Traders say they will pressure the European regulator to take action against the exchange if they do not receive compensation, the plaintiffs are supported by the Swiss Blockchain Consortium. If Binance fails to compensate traders, law firm Lexia Avvocati will not only pursue legal action, but will also report the situation to European and Swiss authorities and ask them to take action against Binance, up to and including demanding that Binance.com be shut down in both Europe and Switzerland.
The Italian publication Milano Finanza provides additional details. Investors' claims are based on the disruptions to the Binance Futures platform on various days, such as February 8, when Tesla announced its $1.5 billion bitcoin purchase. The plaintiffs claim to have lost "tens of millions" of dollars and euros because they failed to make timely changes to their positions. Also, according to them, similar situations occurred on April 18, May 5, May 19, May 28 and June 4. It is worth noting that exceptionally the same problem was in September 2018 (these "technical failures") on Binance occurred and occur constantly, the loss at fault of Binance in the amount of 86,000 USDT appeared in the same way.
Although Binance has not officially offered any compensation, Lexia Avvocati claims that its clients were offered " paltry amounts," which they declined, considering them "ridiculous." The law firm is ready to withdraw the suit if Binance properly settles with customers by July 12. Otherwise, it promises to seek regulatory restrictions on Binance's operations in the EU and Switzerland. As we remember from the Binance fraud story with FTX BULL / BEAR tokens and the attempt to "settle" it all with minimal costs - the compensation there is really ridiculous, 10% maximum that can be returned, sometimes can raise the account status to VIP 1. That is, these are really "ridiculous" compensations and an attempt by signing NDA Agreements not only to rob people, but also to deprive them of the right to demand compensation in the future.
On February 23, Binance publicly acknowledged that there was a glitch in the platform and offered those who encountered the malfunction to file a report to a special address. However, according to attorneys, once the complaint was filed, victims received a very modest offer of compensation in response:
"In response to such claims, Binance offered a paltry amount to compensate Customers who had no choice but to decline such risky offers".
The letter, which was addressed on behalf of Lexia Avvocati customers to various Binance offices and CEO Changpeng Zhao, lays out reasons that could lead to legal action.
"Customers are aware that Binance has not yet taken any corrective action to fix the System".
However, in addition to this technical aspect, there is also a regulatory aspect. Lawyers believe and state the following:
"It appears that Binance offers trading services for financial instruments such as futures without authorization in Europe to operate as an investment firm under the framework set out in Directive 2014/65/EU ("MiFID 2"), and that Binance has not been granted an equivalent license to operate such services in other non-EU jurisdictions, such as Switzerland."
A similar failure, was on May 19 - where a large number of people due to the fault of Binance lost money, we are talking about traders from around the world, including Australia, we wrote about it in the material "Binance users from Australia are considering a class action because of Binance failures" - where we are talking about preparing a second class action against Binance. In Australia, Binance generally pulls off its financial scams in a crude way - Deception of financial regulators and users in Australia by the pseudo-exchange Binance, ScamBinance is communicating with a community of 800 defrauded investors, you can imagine the scope of fraud - that's tens, if not hundreds of millions of dollars/euros stolen.
The Lexia Avvocati website provides a form that anyone can use to join the lawsuit. Of interest is the timing of this filing. In recent weeks, Binance has found itself in the zone of attention of several regulators, including European, Asian, American - we can say that illegal and illicit activities of Binance begins to be suppressed in many countries.
Note that investors periodically file similar claims against exchanges, but they rarely manage to get compensation, except in cases of egregious violations. For example, clients sued Coinbase last December for offering cryptocurrency XRP, which had questionable SEC status, and FTX and Bitfinex were accused of market manipulation. The case with Binance is quite different, such a number of blatant violations and criminal activity is hard to find in the real world, and in the digital world - a complete mess in the digital casino Binance.
We would like to separately emphasize that in the near future the ScamBinance community will try to join the Lexia Avvocati class action lawsuit and in parallel develop a system of class action lawsuits for our community.