Class Action Suits in the USA Could Cost Binance Billions of DollarsWestern editions have reported that a collectie action suit against the Binance platform could cost the exchange billions of dollars. According to Cointelegraph, already 11 companies are preparing to take legal actions against the trading platform. At the same time, the proceedings may last for a minimum of four years if the plaintiffs will file their applications separately.
“It is hard to tell the exact amount, but the companies may demand several billions of dollars. If the situation does not stabilize, Binance risks even going completely bankrupt. It is too early to draw conclusions about the continuation of the court proceedings, as the companies are just preparing lawsuits. Binance should have taken care of the response and taking action”, said the Cointelegraph experts.
Kyle Roche, the founding partner of Roche Cyrulnik Freedman, noted that the class action suits may attract new participants. In case the user has bought tokens of the platform, he already has every reason to go to court. This is especially true for the US residents who have lost the opportunity to return funds or receive dividends because of the platform's withdrawal from the country’s domestic market.
Binance.com stopped its activities in the USA in the summer of the last year. Before that, users from the USA could trade with ERC-20 tokens, including Binance Coin. The Roche Cyrulnik Freedman representatives noted that it is now virtually impossible to sell the coins left with US. clients due to the ban on the exchange operation on the USA territory.
“Resale of tokens through third-party platforms is considered illegal. If the company will return them through intermediaries, it will also violate a part of important legal provisions. Tokens can be registered as securities, but even this will not fix the problem. The release of assets in the US is now restricted due to a decision of the Securities and Exchange Commission. Attempts by Binance to settle accounts with investors will also result in lawsuits,” experts said.
The following companies will be defendants in the lawsuits: Binance, KuCoin, Block.one, Quantstamp, Civic, Tron Foundation, BitMEX, BProtocol, Status, KayDex, BiBox and HDR Global Trading, which took part in the distribution of tokens and now support them. There are no comments from the platform itself on the subsequent actions yet.
Users should think about where the pseudo-exchange Binance will get funds for the relevant payments following court decisions, and take a decision – to withdraw their monies from the “black hole” of the illegal and underground Binance exchange.